France

Progress made by France's largest banks with restructuring plans they launched late last year in response to the European debt crisis should help ease pressure on their ratings, Fitch Ratings said Tuesday, Dow Jones reported. French banks were hit hard last summer when investors retreated from the euro zone because of deepening concerns over their exposure to sovereign debt in Europe's weaker economies, forcing the main listed players to start reducing assets and to cut funding needs. Fitch said that because of those actions they have since won back some market confidence.

France has enviable economic strengths: an educated and productive workforce, more big firms in the global Fortune 500 than any other European country, and strength in services and high-end manufacturing, The Economist reported. However, the fundamentals are much grimmer. France has not balanced its books since 1974. Public debt stands at 90% of GDP and rising. Public spending, at 56% of GDP, gobbles up a bigger chunk of output than in any other euro-zone country—more even than in Sweden. The banks are undercapitalised.

Nortel Networks Inc, a former telecoms company that is liquidating in bankruptcy, won a dismissal of some claims by European affiliates that were seeking a large chunk of the company's $9 billion cash pile, Reuters reported. Nortel's British, Irish and French affiliates had sought more than $3 billion, claiming Nortel Networks Inc has breached its fiduciary duties to the European businesses by stripping them of cash and leaving them insolvent. A Delaware bankruptcy court dismissed those claims in part because Nortel Networks, or NNI, was not a director of the European affiliates.

Private investor Gary Klesch said on Thursday that his Swiss-based company has submitted the only bid for insolvent refiner Petroplus' French plant Petit-Couronne, Reuters reported. Asked if it was true that his firm had made an offer for the refiner, he said: "It is. We were told by the court there were no other bids ...We are in negotiations on the others." Klesch also confirmed an earlier report that his firm had pledged to invest 160 million euros in the refinery over five years and to retain around 410 of 550 jobs.

French President Nicolas Sarkozy said Monday he will establish a new tax linked to nationality to prevent rich taxpayers from leaving the country and taking up residency in other countries with lower tax rates, if he's elected for a second term in May, Dow Jones reported. "I want tax payment and nationality to be linked," Sarkozy said, answering questions in an election show on TF1.

French President Nicolas Sarkozy on Tuesday offered plans to create a minimum tax on profit of large companies if re-elected for a second term in elections this spring, The Wall Street Journal reported. Mr. Sarkozy, who is trailing challenger Socialist candidate François Hollande in polls, made the comments as the election campaign heats up. and the two front-runners seek to gain traction. Mr. Hollande proposed a tax of a different nature last week: a special 75% tax bracket on France's wealthiest individuals that was well received by voters. Mr.

French presidential front-runner François Hollande said taxpayers earning over €1 million ($1.35 million) a year would be subjected to a special 75% tax bracket should he be elected, underscoring heightened interest across Europe in raising taxes on the wealthiest individuals, The Wall Street Journal reported. Speaking on French television late Monday, the Socialist candidate lamented the "considerable increase" in French corporate executives' pay, which he put at €2 million a year on average. "How can we accept that?" asked Mr. Hollande.

Royal Dutch Shell is in talks with bankrupt refiner Petroplus to process crude oil temporarily at its Petit-Couronne facility in France, a union official said on Monday, Reuters reported. The refinery would process crude oil for Shell while a buyer is sought for the installation in northern France, under a draft deal that may be signed this week, said Nicolas Vincent of the CGT union. Shell confirmed that it was in talks on the future of the refinery, which it used to own.

The French government and two state-controlled entities have reached an agreement over how to restructure the French municipal lending operations of troubled bank Dexia SA , people familiar with the matter said Thursday, The Wall Street Journal reported. Under the proposed agreement, the French government and state financial house Caisse des Depots & Consignations will each pick up a 31.67% stake in Dexia Municipal Agency or Dexma, Dexia's municipal-lending unit.

France's biggest listed banks are expected to report lower earnings next week as they forge ahead with downsizing plans aimed at addressing concerns over their exposure to the sovereign debt of Europe's troubled economies, Dow Jones reported. BNP Paribas and Societe Generale are likely to have been hit in the fourth quarter by restructuring costs as the two banks strive to reduce the size of their balance sheets and meet Europe's new stringent capital rules. Analysts are expecting further write-downs on the banks' Greek sovereign bonds.