PARIS (Bloomberg) -- PSA/Peugeot-Citroen will be removed from France's leading stock index after its shares declined more than 60 percent in the last 12 months.

Peugeot shares have been trading near a 26-year low in recent months as Europe's economy struggles. The automotive division has been burning through 200 million euros ($250 million) in cash a month for the last year, CEO Philippe Varin said in July as the company reported an 819 million-euro first-half net loss.

Europe's second-largest automaker will be replaced by chemicals and plastics maker Solvay SA in the CAC 40 index on Sept. 24, NYSE Euronext said in a statement. Peugeot has been a member of the CAC 40 since the creation of the index in 1987.

Jean-Baptiste Mounier, a spokesman for Peugeot, declined to comment.

Peugeot's stock declined as much as 3.1 percent today and traded at 5.97 euros, down 1.2 percent, at 9:10 a.m. in Paris.

" Peugeot has been the weakest weight in the index for several quarters now," Christophe Wakim, a quantitative analyst at Exane BNP Paribas, said in an interview with Bloomberg TV before the decision. " It's just the reflection that Peugeot, unfortunately, has destroyed value for its shareholders."

Solvay, a maker of chemicals and plastics, gained as much as 2.4 percent in Brussels and was up 2.2 percent at 90.84 euros.

Board rules

The decision to remove Peugeot came after a meeting of NYSE Euronext's seven-member scientific board, led by Roland Bellegarde, executive vice president for European listings and cash trading at the transatlantic stock exchange.

Reviews take place every quarter. The board is guided by the number of shares available, known as free float, as well as market capitalization and revenue trends, NYSE Euronext said in a separate statement.

The board picks " the most representative stocks," it said. The last criteria " is the most sensitive one, as Peugeot still employs directly about 100,000 people in France," Florent Couvreur, an analyst at CM-CIC Securities, said by phone. " Its shares are indeed very low, but their price could double quickly if macroecomonic conditions improved."

Stocks that are deleted from the CAC 40 usually underperform the index over the year following their exit, according to Exane BNP Paribas.

The average decline is about 15 percent, analysts at the brokerage said in a note.

Peugeot shares were first listed in Paris in 1925 and have traded continuously since then.

Continental AG, Europe's second-largest auto-parts maker, returned to Germany's benchmark DAX index after a 45-month absence in a sign of its recovery from debt woes that encouraged a takeover bid from Schaeffler Group.

Among several changes in the gauge of Germany's 30 biggest listed companies, MAN SE was removed after Volkswagen AG increased its stake in the truckmaker to more than 75 percent, Deutsche Boerse AG, the Frankfurt-based exchange operator that controls the index, said in a statement on Sept. 5.

What is QE3? A fair number of news organizations have been talking about QE3.  What is the possibility of QE3?  How will rating agencies react in the event of the QE3?  Will the value of the dollar decline if Congress approves a QE3?  Does Congress have to approve a QE3?  Is QE3 just an attempt to monetize our problems away?

Monetize is a catch all for adding money to the economy.  Contrary to popular opinion, the Fed does not create money out of thin air.  It is either printed on linen pulp paper or created with the aid of a very tangible  computer.  Somebody works very hard typing  $ and 0s, which creates value.

But what is QE3?  And for that matter what are QE1 and QE2?

The short answer is QE3 stands for Quantitative Easing (round) 3.    The Federal Reserve can stimulate the economy using any number of tools.  Quantitative easing is just one of them.

The Federal Reserve can  lower the interest rate.  If the rate is lower, then banks will be more eager to lend money to other banks.  If the rate is zero or .25% above zero then it is time dig a little deeper into the tool box.

What is QE1- the Wall Street Bailout.  The stock market is falling the stock market is falling.  Sometime during the summer and early fall of 2008 the free hand of the market got burned.  It stuck its hand into “complicated financial instruments that only a few people in the world understand” and got badly burned.  The Central Bank rushed in with socialized burn cream.

What is QE2- An ocean liner.  Which stands for Queen Elizabeth II.  (Oh, that’s the other QE2…)  Right after Halloween in 2010 the Federal Reserve decided that the US economy was not growing fast enough.  It was growing…but not fast enough.  Unemployment was hovering over 9%, a few hundred banks had failed since 2008, the price of gold had soared, homeowners were underwater.  Things were ok, but the Fed decided to give the recovery a little boost.  So, they  bought Treasury Bonds.  Lots of them.  And unlike QE1, QE2 didn’t have any specific goal in mind— So yes it was a success.

What is QE3- Well, nobody knows for sure yet.  Maybe the Federal Reserve will buy more Tbills. Or maybe they will bailout banks again.   Or maybe the Fed will, oh what the hell.  Nobody expects the US will ever pay back $14 trillion.  So, go ahead raise the debt ceiling. What’s another trillion or two?  Go ahead Moody — downgrade our credit rating.  QE3 will work, you’ll see!