There was a lot of commotion today in Belgium surrounding the news that Arco Group, an investment vehicle from the Christian pillar (combining labor unions, public health care providers,... -and: the Christian-democrat party) will be liquidated as a result of the losses it took by investing in Dexia Bank, the shares of which recently plummeted. Arco however brokered a deal with the (Christian-Democrat) government back in 2008 when the refinancing of Dexia was necessary to keep it from going bankrupt. They got the government -no details are available on how much convincing it took them, though there are persistent rumors about blackmail- to give Arco shares the same federal insurance savings get in Belgium, even though the company traded in financial instruments. The liquidation of Arco is now estimated to cost the Belgian tax payer 1.5 billion euro.
Of course regular Dexia shareholders can not apply to get their losses covered by the government, nor could the ones from Fortis when that bank was sold off to France. That's how buying and selling of shares works. You know that you're taking a risk when investing, and that if you choose to do so in shares, your money may be at risk.
Unless you're in bed with the prime minister.
