Financial Regulatory Forum

BREAKINGVIEWS-Paris, Berlin might find Greek bailout profitable

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Pierre Briancon

PARIS, March 1 (Reuters Breakingviews) – Forget for a moment the headline-grabbing numbers and the political and financial drama, which supposedly includes a European Union Greek bailout worth tens of billion of euros. It now appears that the French and German governments are working on a scheme that would end up costing much less, and may be profitable, if coupled as planned with a tough Greek deficit reduction.

It goes like this. France and Germany first make sure that their own banks keep taking on Greek bonds. This will help Athens raise the 45 billion-odd euros ($61 billion) it still needs this year, about half in April and May. To nudge their private-sector banks in that direction, the two governments won’t rely only on the traditional, friendly but firm political pressure. They will also dangle financial guarantees from state-owned financial powerhouses, Germany’s KfW  and France’s Caisse des Depots (CDC).

German and French banks together hold between a quarter and a third of Greece’s 300 million euros of foreign debt, according to some estimates. They would keep their share, but the joint action would also serve as a catalyst, with other euro zone members expected to pitch in according to their economic weight.

Announcing such a plan would by itself do a lot to cool the crisis — rumours that it was in the works shrank Greek bond spreads on Monday. The use of state-owned financial institutions would bow to the letter — if not the spirit — of EU treaties prohibiting direct bailouts by member states.

Switzerland, France settle dispute over tax records

DAVOS, Switzerland, Jan 27 (Reuters) – Switzerland and France settled a row over stolen bank records on Wednesday that was blocking a treaty aimed at helping Paris catch tax cheats.

Switzerland said in December it would freeze the tax treaty talks after French authorities obtained tax-sensitive client information from a former HSBC employee, which it said helped identify 3,000 suspected French tax evaders.

“We have found an agreement,” Swiss Finance Minister Hans-Rudolf Merz said after talks with French Budget Minister Eric Woerth on the sidelines of a World Economic Forum meeting.

France joins UK to target traders in bonus tax move

By Sudip Kar-Gupta and Sumeet Desai

PARIS/LONDON, Dec 16 (Reuters) – France singled out frontline financial traders for a special 50 percent tax on bonuses, following Britain by tapping into public anger over the pay deals of bankers whom many blame for the financial crisis.

Britain plans to tax bonuses for all bankers, whether merger and acquisition specialists, credit providers or trading room stars, while the French moves announced on Wednesday are restricted to those trading financial instruments.

Both countries’ measures will apply above certain thresholds, with the French measure for instance targeting bonuses above 27,500 euros ($40,060).

ANALYSIS-After hardball, Greece gets EU solidarity pledges

EU High Representative for Foreign Affairs Catherine Ashton (L) poses with Greek Prime Minister George Papandreou during a European Union leaders summit in Brussels December 10, 2009.  REUTERS/Yves Herman By Brian Love, European Economics Correspondent

PARIS, Dec 11 (Reuters) – Reassuring noises from France and Germany suggest Greece can ultimately count on help from its euro zone partners if its debt problems get out of hand — though its partners were content to see financial markets scare Athens for a while.

As Greek bond spreads ballooned early this week, officials in major European Union governments indirectly fuelled the panic by refraining from making clear pledges of support for Greece.

Most of the officials’ public statements focused on urging Athens to face up to its problems and, like Ireland, take drastic steps such as public spending cuts to reduce its budget deficit and prevent its debt from becoming unserviceable.

Banks expected to swallow most of new UK bonus tax

By Steve Slater

LONDON, Dec 11 (Reuters) – Banks are likely to swallow the bulk of the cost of a shock UK tax on bonuses unveiled this week, rather than pass it on to staff or find loopholes, as more countries join the clampdown on payouts, industry experts and sources said.

Britain slapped a special 50 percent tax on bank bonuses on Wednesday, provoking outrage across the industry and raising fears that London will lose talented staff and business to rival financial centres.

But France looks set to follow with its own one-off tax and Germany and other countries may clamp down on the free-wheeling bonus culture that critics say fueled the financial crisis. If more follow, it could reduce the impact on London and also prompt banks to absorb most of the cost, experts said.

French lower house of parliament backs bank tax

PARIS, Oct 23 (Reuters) – France’s lower house of parliament on Friday approved a plan to impose a 10 percent tax on bank profits in 2010 despite opposition from the government.The National Assembly, adopted the opposition-proposed measure by 44 votes to 40.

However, a source in President Nicolas Sarkozy’s ruling UMP party said the government would ask for a new vote, claiming a technical problem because two UMP deputies had accidentally voted the wrong way.

There are 577 deputies in the lower house and President Nicolas Sarkozy’s centre-right UMP party has a comfortable majority but many were absent for the evening vote.

France to tighten rules on dealing with tax havens

PARIS, Oct 7 (Reuters) – The French government plans to strengthen its fiscal rules towards countries on the OECD’s tax “grey list” that have not signed bilateral agreements with France, Prime Minister Francois Fillon said on Wednesday.


Sarkozy says G20 bonus deal possible without caps

French President Nicolas Sarkozy speaks during a news conference at Alvorada Palace in Brasilia September 7, 2009.  REUTERS/Bruno Domingos (BRAZIL POLITICS)    BRUSSELS, Sept 17 (Reuters) – France is ready to accept a G20 agreement on bonuses that does not include caps as long as other measures to curb bonuses are adopted, President Nicolas Sarkozy said on Thursday. (more…)

France’s Lagarde says solid bonus limits needed

French Economy Minister Christine Lagarde speaks during a news conference in Riyadh, May 10, 2009. REUTERS/Fahad Shadeed  (SAUDI ARABIA POLITICS)    PARIS, Sept 17 (Reuters) – France will not push for specific caps on bankers’ bonuses at next week’s meeting of leaders of the Group of 20 nations but wants clear restrictions, Economy Minister Christine Lagarde said in an interview on Thursday. (more…)

France asks banks for more foreign transfer details

PARIS, Sep 8 (Reuters) – France wants its banks to provide more details on the identity of people transferring money to tax havens and wants a new legal framework to be finalised by the end of September, the budget ministry said on Tuesday. (more…)