Extreme reaction in France: The state may take over banks in case they refuse to offer credits

The French Government may buy stock from banks that benefitted from the financial aid plan, in case the banks to not re-launch the credit offering operations for companies facing lack of cash, Prime Minister Francois Fillon declared, according to Reuters. „They must offer credits now”, he said in an interview for the France 2 TV station.

In case the banks do not respond to the call, the state may withdraw the financing previously approved. In this case, the banks will face financial difficulties and the state will have to buy shares, change the boards and take over the control over the banks’ strategies, said the head of government.

France loaned 10.5 billion Euros to a series of local banks, encouraging them to offer credit to companies, but now the authorities feel that the banks failed to keep their share of the bargain.

President Sarkozy threatened to make public the names of the financial institutions that didn’t react properly. Until now, the main benefiters of the state aid were Credit Agricole – 3 billion Euros, BNP Paribas – 2.55 billion Euros, Societe Generale – 1.7 billion Euros, Credit Mutuel – 1.2 billion Euros, Caisse d’Epargne – 1.2 billion Euros and Banque Populaire 0.95 billion Euros.