(Full story)
By Lionel Laurent and Leigh Thomas
PARIS (Reuters) - A
state lifeline to wind down a small, ailing French mortgage lender is
likely to carry a political price for President Francois Hollande as he grapples with rising unemployment and economic slowdown, even though there is no immediate budget hit.
The government promised over the weekend to guarantee Credit Immobilier de France's debt, putting an end to the bank's vain search for a buyer after credit rating downgrades drove it into a funding wall.
Unlike Franco-Belgian bank Dexia, which was also rescued with guarantees in the wake of the eurozone debt crisis, CIF is profitable and can be wound down gradually without requiring an injection of taxpayer money, bankers said Monday.
But the bailout
risks giving voters the impression that the Socialist president is going
soft on the financial sector after promising during his election
campaign to crack down on the industry for perceived excessive
risk-taking and lavish bonuses.
The daily Le Monde
highlighted the irony with a cartoon showing Hollande rescuing a
drowning CIF banker while recalling his campaign mantra that "my
adversary is the world of finance ... but I don't like seeing people
suffer".
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