Twelve billion that pass under the nose of the state. As the Government drawer bottoms (see the previous page) to complete an impossible budget, that’s not lacking salt. In the wake of BNP Paribas, Societe Generale announced yesterday its intention to launch a bond issue of scale which should enable it to repay to the state the promised funds (3.4 billion euros) of the loudest subprime crisis, while the international financial system was shaking on its foundations. And those two should school. With the role of fall guy, the French state.
During the establishment of the bank rescue plan, no one disputed the imperative need to support financial institutions threatened with bankruptcy. Nevertheless, some were surprised that the authorities have not coined more dearly their forced generosity. “When he met at the Elysee bankers to pull out of the rut, Nicolas Sarkozy has called them one thing in return for massive state aid: they launch a major communication campaign at their own expense to reassure businesses and individuals on access to credit, “says a still stunned participant of the strange way the President to protect the public interest. Especially, at the time, the left demanded that the state becomes a shareholder with full banking and administrators up to their advice. Niet responded the government. In response to suspicions of “gifts to banks,” the Economy Minister Christine Lagarde had then insisted on earnings was going to remove the state of this operation: the payment of sumptuary interest (7.65% in the departure and up 14.8%) in exchange for its largesse, including some 20 billion euros in preference shares.
But then, the éclopées yesterday are again today queens of the financial world. The state, which had injected 5.1 billion euros in the capital of BNP Paribas, goes well recover its increased up 226 million euros of interest. Where the neophyte might applaud, the casual observer chokes. The preference shares will be redeemed at the issue price, ie based on the market price prevailing at the time of entry of the state in banks on March 31. Suffice to say the lowest. Since their side exploded stock exchange. “By entering the capital of BNP Paribas at the time the action was worth 27.24 euros in and out when it is 58.20, the government is deprived of a gain of 113%, therefore d a recipe of 5.8 billion euros! “rightly denounces the PS Chairman of the Finance Committee of the National Assembly, Didier Migaud.
For Societe Generale, profit 3.4 billion of aid, the calculation gives similar results: since March 31, the share price has gained 175%, bringing the shortfall to the State 6 billion.
The cost of Elysee’s financial incompetence thus amounts to 12 billion well. Minimum as agricultural and BPCE credit must still pay their dues. A windfall that was nevertheless very useful at a time when the budget hole is abysmal (140 billion euros for 2009). The attacking front, the weak defense: “The government does not speculation,” replied Christine Lagarde yesterday.