Wednesday 13 December 2017

Leigh Thomas: Why are the French pushing hard for European banking union? Because they know they're next

French President Francois Hollande
French President Francois Hollande

WITH a gaping public deficit and record level of debt, the euro zone's second largest economy wants to be sure it is not sucked into the bloc's game of debt-crisis dominoes, hence Paris's forceful lobbying for ways to shore up Europe's banks.

France is one of the strongest advocates of a Europe-wide banking union and, with an eye on its own banks' exposure to vulnerable debt in struggling countries, for immediate recapitalisation of banks from euro zone rescue funds.

"I think the French are pushing this for a simple reason: They bloody well know they're next in line. They're after Italy," said Nicholas Spiro, head of consultancy Spiro Sovereign Strategy.

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