The European Commission said a Belgian deposit-guarantee program for the cooperatives of Dexia SA (DEXB) shareholder group Arco may be illegal state support, De Morgen reported, referring to an April 4 letter from European Competition Commissioner Joaquin Almunia to the Belgian government.

The guarantee program, which could cost the Belgian state more than 1 billion euros, was “unfit, unnecessary and out of proportion,” according to the commission, the Belgian newspaper reported.

To contact the reporter on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net

To contact the editor responsible for this story:at bkammel@bloomberg.net