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How debt-laden French cities avoid Detroitís fate: sue the banks
Reuters ^ | 07/23/2013 | Peter Gumbel

Posted on 07/23/2013 2:43:08 PM PDT by SeekAndFind

Within hours of Detroit filing the biggest municipal bankruptcy in U.S. history on July 18, French TV and other media followed up with the reassuring message that, in France at least, such a turn of events would be impossible. Under French law, municipalities are required to balance their budgets, and the national government can — and occasionally does — intervene to force them to comply.

But take a closer a look at what’s been happening since the 2007 financial crisis, and a rather more nuanced, and surprising, picture emerges. For more than a dozen sizable towns and districts across France have been caught in a vicious debt trap that has seriously imperiled their financial well-being. In turn, they have mounted a furious counterattack that involves suing the banks that financed their credits. At the same time, they have launched an intense lobbying of national government for substantive help to shore up their finances.

On both counts they’re winning, in a way that would turn Detroit green with envy.

The national government has thrown a lifeline to the troubled communities, unveiling an arsenal of new measures — including about $4 billion in extra cash — to help assuage the crisis. And, to their delight, the local authorities have won landmark judgments against the banks that call into question the very validity of the loans they took out.

Similar initiatives have been launched by municipalities in other European nations, including Germany and Italy, with more mixed results.

(Excerpt) Read more at blogs.reuters.com ...


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; News/Current Events; US: Michigan
KEYWORDS: banks; chapter9; debt; detroit; france; michigan; rosemaryaquillina

1 posted on 07/23/2013 2:43:08 PM PDT by SeekAndFind
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To: SeekAndFind
Consuming the seed corn to live high on the hog today.

Who will lend in the future?

Oh wait I see it now.

Step 1: Force the banks to loan money to fund unsustainable gov't spending.

Step 2: Sue the banks for making irresponsible loans to governments that can't pay.

Step 3: Print money to bail out banks that got sued and destroyed.

2 posted on 07/23/2013 2:48:11 PM PDT by ClaytonP
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To: SeekAndFind

Liberalism begins in France. The French Revolution is really the starting point for the bad ideas of modern Liberalism.

This continues today. A French manager I know told me “we hate the banks”, it’s “their fault that we have this debt crisis”.

There’s some truth to it. But blaming everyone else for your problems when all they did is make you an offer is characteristic of a narcissistic culture where no one accepts blame.

That’s France.


3 posted on 07/23/2013 2:50:00 PM PDT by Regulator
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To: SeekAndFind

There was a French king who did that to the Knights Templar....only he skipped the courts and suing stuff..........


4 posted on 07/23/2013 2:54:16 PM PDT by Red Badger (Want to be surprised? Google your own name......Want to have fun? Google your friend's names........)
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