Global Economy

[Guest]

Well, I was dying to hear from France . <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->

<b>French Banks to Get EU10.5 Billion Aid, Scrap Executive Bonuses</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 21 (Bloomberg) -- French President Nicolas Sarkozy agreed to provide a further <b>10.5 billion euros ($13.6 billion) in aid to the country’s biggest lenders </b>in exchange for their top executives giving up their bonuses.
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<b>“We ask banks that make a profit to finance the economy” and not reward shareholders,</b> Finance Minister Christine Lagarde told reporters after the bankers met Sarkozy and top officials in Paris. The state wants banks to use the extra funds to boost shareholder equity, she said. The more profitable banks may still pay a dividend, she said.

The new funds will be made available “shortly,” a statement said.
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Separately, the French banking federation said that the banks “are playing the game” and maintain their goal of increased lending even as the economy deteriorates.

The European Union yesterday projected that the <b>French economy will contract 1.8 percent this year</b>, cutting its earlier forecast for no growth, a forecast Lagarde called “painful.” Officially, she still projects the economy will expand next year, though she said today she’s preparing new estimates.
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If this is France policy, well we should expect recession to go much deeper.