The word "nationalization" is not pronounced. But the France is indeed preparing to fly to the rescue of his banks, "in case", as decided to make the British Government yesterday morning. Opening the debate on the financial crisis in the National Assembly, in the afternoon, the Prime Minister, François Fillon, announced the establishment of a "legal structure" to intervene financially, and the case by case basis, with the banking institutions in difficulty. "Today, this structure exists, it is already the State participation in Dexia," he said.
Borrowing markets
Taken information at Bercy, the structure in question has formally created "a few days' ago and bears the name of equity of the State (EPPS) society. It is managed by the Agency of the State, usual armed arm of the State shareholder interests. Its financial resources will be obtained by borrowing markets, through the Agency France Treasury. It will benefit from the guarantee of the State as national representation will be given the green light to this effect. "So that she could have all the necessary capital to interventions that warrant in the future, the Government seek the Parliament, by way of an amendment to the Finance Bill, the explicit guarantee of the State", noted François Fillon. In the meantime, it is not by borrowing the Dexia operation has been conducted. "The billion euros was drew provisionally on cash", said the Ministry of the economy.
The budget debate to start on 20 October, is not before two weeks, at best, the EPPS could actually work. Officially, its purpose will be, in case a bank is in trouble, "to the recapitalization, to master the strategy and management," to the right and to the interests of the State on the market when the circumstances permit, said the Prime Minister. "We're building a tool that will intervene if needed", explained tersely, yesterday evening, the Office of the Minister, Christine Lagarde.
No prior encryption
According to our information, the EPPS could yet go beyond, also playing the role assigned in his time at the COR, the structure of hiving-off of Credit Lyonnais. To further assist Dexia. If Matignon ensures that it is in no way a fund with a priori, the new structure builds despite radical schema that comes from being stopped in London, where it aims nothing more nor less than to "restructure" the banking system.
In fact, it is not excluded that the EPPS supports the "rotten" active potential of the French settlements. "It will be fed very gradually, to not rush markets, the time that banks require certain assets, said a source at Bercy, is not yet the amounts that the company could lift, this will represent 2 GDP points maximum.".
Clearly, if it is in no way engage the budget of the State, is the public debt which would increase, for an amount of up to EUR 40 billion! Matignon replies that no prior encryption cannot be made, as is the case in the United Kingdom (50 billion pounds, or EUR 64.4 billion) and Spain (30 billion euros), where a fund to support banks also was formed Tuesday. Moreover, the French banks are not seeking a global fund.
The prudence of François Fillon is also explained by the concern to avoid adding to the ambient anxiety. In any case, the EPPS will not process the issue of bank liquidity. The intervention of central banks is another matter, wishes to emphasize Bercy.
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