France

Belgian financial group Dexia has entered into exclusive talks with New York Life Investments to sell its asset management unit, it said late on Thursday. The group, which has to sell Dexia Asset Management as part of a deal with European regulators in exchange for state aid it received in recent years, did not say how much New York Life Investments planned to offer. Dexia had initially agreed to sell the asset management arm to Hong Kong-based GCS Capital for 380 million euros ($507 million), but that deal fell through in July.

France has stepped up its assault on tax havens by blacklisting Bermuda, British Virgin Islands and Jersey, in a sudden move set to impose heavy penalties on thousands of French individuals and businesses, the Financial Times reported. The three offshore centres have been added to a list of “non-co-operative jurisdictions”, triggering withholding taxes of up to 75 per cent on payments from France.

The French government has unveiled a much-anticipated reform of its deficit-hit pension system, raising the level and duration of contributions but avoiding some of the measures demanded by the EU and others seeking a more radical overhaul, the Financial Times reported. Anxious to avoid an outbreak of social conflict that accompanied previous reform efforts, the government stuck to a promise by President François Hollande not to raise the prevailing minimum retirement age of 62, as many other European countries have done, and as Brussels recommended.

France's stagnant economy has thwarted most of President François Hollande's economic plans, leaving him reliant on state-sponsored jobs to deliver his key remaining objective: curbing rising unemployment by the end of the year, The Wall Street Journal reported. A primary vehicle for government efforts to buoy the job market is the financing of up to 75% of the cost of thousands of jobs for young, low-skilled workers. Over 40,000 youths have been channeled into such jobs so far this year, and the government predicts that number to rise to 100,000 by the end of December.

The European Union on Tuesday gave approval to a financial guarantee from the French state for PSA Peugeot Citroën's in-house banking unit, saying the aid is essential to help the ailing auto maker return to health, The Wall Street Journal reported. Apart from the loan guarantee, the move gives Peugeot a vote of confidence for a restructuring plan made necessary by the collapse of the European auto market.

Europe’s long-running economic troubles have been, for the most part, confined to the feeble countries of Europe: Greece, Spain, Portugal and Italy. But more and more they are coming home to roost in France, raising questions about whether one of the Continent’s biggest economies may become the next sick man of Europe, the International Herald Tribune reported. By many measures, France is already moored in malaise.

German and French businesses will see their borrowing costs tumble by tens of billions of euros over the coming years thanks to aggressive central bank action to lower the cost of funding. Countries in the credit starved periphery – the main target of easy monetary policy – will continue to struggle however, and will benefit far less from a projected €42bn reduction in debt payments over the next five years, according to an FT analysis of European Central Bank data.

The French economy is facing a growing handicap as it struggles to create jobs and crawl out of recession: Despite low interest rates, companies and entrepreneurs are cutting back on their investments. They're delaying plans to expand existing factories, and canceling plans to build new ones, The Wall Street Journal reported. Behind the reluctance is a difficult combination. Higher taxes and cheaper foreign competition have pushed margins for French companies down to their lowest level since 1985—reducing companies' ability to stomach risk.

French water company Saur is set to be taken over by its creditors later this month after securing a restructuring deal with all its stakeholders that will see its burdensome debt pile cut in half. The state-backed company, which competes with France’s Veolia Environnement and Suez Environnement, has negotiated a deal where its more than 60 bank lenders will take ownership in return for writing off much of the debt, the Financial Times reported. The group had been struggling with €1.8bn worth of debt stemming from a 2007 leveraged buyout, which will come down to €900m.

France aims to make budget savings of around €28 billion over the next two years to restore public finances to order, finance minister Pierre Moscovici said Tuesday, the Irish Times reported. The government is struggling to find the right balance between belt-tightening and tax increases as it seeks to rein in the public deficit without hitting the already faltering economy. Speaking ahead of a parliamentary debate on next year’s budget, Mr Moscovici said that the government wanted savings of €14 billion in 2014.