Brussels has warned France and Italy that they are running stubbornly high levels of public debt, meaning their future budgets risk breaching EU rules and alarming investors, the Financial Times reported. The European Commission on Wednesday published its opinion on the 2020 draft spending plans of all eurozone member states.
France added to the growing chorus of lawmakers and executives seeing consolidation as an avenue to revive Europe’s ailing banks, ahead of a key meeting that may jumpstart a plan to create a single market for the industry, Bloomberg News reported. Prime Minister Edouard Philippe, speaking in an interview in Paris on Tuesday, said mergers to create “critical-size, global actors” in European finance would be a “good thing.” He backed a call by German Finance Minister Olaf Scholz to complete the project for a banking union that would make such deals easier.
Casino Guichard-Perrachon SA announced late Tuesday that it was working on a 3.5 billion-euro ($3.9 billion) refinancing, a Bloomberg View reported. That should be positive for the owner of France’s famous Monoprix and Franprix chains. But as usual with the sprawling retail group, there is probably more here than meets the eye. At first glance the move looks like sensible balance sheet management. The company has about 500 million euros of bonds maturing in March 2020, and more over the next few years. But the refinancing comes at a price.
Casino, the French retailer, has moved to further boost its financial position by raising €1.5bn in bank loans and extending its debt maturities for four years. The company said after the market closed on Tuesday that it is raising €1.5bn in new financing in order to refinance part of its existing debt, the Financial Times reported. The group is also working to agree a new syndicated revolving facility for about €2bn, which will mature in October 2023. It said that it has already received commitments for more than €1.6bn from 14 French and international banks.
Societe Generale is paring back credit-default swap trading as part of the overhaul of its investment bank, a move that is sending ripples through the credit derivatives industry where the French lender played an important role until recently, Reuters reported. SG announced 1,600 job cuts earlier this year and pledged to restructure its fixed-income unit after poor results, with senior management indicating it would focus less on “flow” trading of standardised products. The bank’s credit-trading desk is one area where it is scaling back.
The French government will ask Air France to “take into account” the situation of bankrupt French budget airline Aigle Azur’s 1,150 employees, said a government minister on Monday, Reuters reported. “With the secretary of state for Transport Jean-Baptiste Djebbari, we will meet the Air France executives tomorrow and we’ll have the opportunity to ask them to take into account the situation of these employees, pilots included,” Elisabeth Borne, the government minister in charge of both the environment and transport sectors, told RTL radio.
Air France-KLM boss Ben Smith on Friday defended his decision not to fly to the aid of two collapsed French airlines, and said market consolidation through bankruptcies would eventually benefit the country’s aviation industry and jobs, Reuters reported. Air France last week withdrew a rescue bid for Aigle Azur, which was formally wound down on Friday, and has since rebuffed overtures by XL Airways, another insolvent carrier.
The French government said it would reduce taxes on individuals and businesses by €10.2 billion as President Emmanuel Macron seeks to breathe new life into his drive to overhaul France’s economy and stave off a revival of the yellow-vest protests that nearly doomed his agenda, The Wall Street Journal reported. In presenting its 2020 budget on Thursday, the government said it planned to lower taxes on households by €9.3 billion and provide companies with tax relief through a lower rate. The measures, worth a total of $11.1 billion, illustrate the delicate balancing act Mr.
French airline XL Airways has called on Air France to discuss a rescue deal to avert the collapse of the budget carrier that halted ticket sales and payments last week, Reuters reported. XL Airways, which has said it needs 35 million euros ($38.6 million) in fresh financing, requested in a statement on Sunday a meeting with Air France and the French authorities in the coming hours before a court is expected to put it into receivership on Monday.