Could your commune go bust from Toxic debt?

[NormanH]

Apparently many communes have taken out loans, usually from  Dexia, on which the level of interest has massively increased for various reasons.

This could lead to bankruptcy in some cases, and the bill will have to be picked up by the  local taxpayer

Is your commune affected?

See here,

http://www.liberation.fr/societe/01012360988-votre-commune-est-elle-infectee-par-un-emprunt-toxique

and the map here

http://labs.liberation.fr/maps/carte-emprunts-toxiques/

(you can click on the dots to get full details of the problem)

We might be seeing a lot more posts about the rise in local taxes....

Here is one example got by clicking on the town on the map in the link above:

VILLE DE BEZIERS

Nom de l'emprunt	DUALYS FLEXI
Type d'emprunt	Structure complexe d'options sur cours de change
Date de début	10/1/2007
Date de fin	4/1/2027
Montant	12 604 000 €
Surcoûts	3 446 000 €
Ratio surcoûts/montant	27.34 %
Banque de contrepartie	GOLDMAN SACHS

Nom de l'emprunt	TOFIXMS+
Type d'emprunt	Structure complexe d'options sur écart de taux CMS
Date de début	10/1/2007
Date de fin	2/1/2027
Montant	12 604 000 €
Surcoûts	1 616 000 €
Ratio surcoûts/montant	12.82 %
Banque de contrepartie	CITIBANK

[breizh]

Dexia is part of BNP. For some reason, to which I admit I have never got a straight answer, Dexia, though a Belgium domiciled bank, lent in USD* and CHF*. The loans were taken out tied to CHF, as it was deemed more stable to EUR. CHF went through the roof. The cost of the loans went into the stratosphere. On the news there have been stories of communes paying 70% interest/annum, on 10 year loans, with the interest being 5 times the total tax take of the commume[:@]

Snake oil salesmen pedalling products the customers never understood, allied with the traditional french brown envelope under the table[:@]

If this was happening anywhere else it would headline news. As normal in France, the boys from the Grandes Ecoles sweep it under the carpet, cheerfully abetted by their poodle press, and the merrygoround of Finance Ministry fonc job, to bank exec job, continues.[:@]

* Could be due to the long time lack of liquidity in French banks, and therefore having to borrow short term for the US and Switzerland. Lending in the currency they were borrowing in ensured Dexia/BNP doesn't get hit by forex losses, the borrower takes the hit. Evidence: The catastrophic collapse of the French banks share prices over the last few weeks, as the US/CH refused to continue funding, due to the to lying gits at the banks pretending their Sov/Comm loans in the weaker Eurozone countries were all fully covered. So, now the ECB has to borrow the USD/CHF to lend to the French banks.

Sorry, for the rant, but about 2 months ago on page 5 of our local (Meaux) paper there was a paragraph, explaining that our ville had such a hole, and taxes will rise to cover it. Presumeably the Editor didn't think it was front page news[:@] Everything that is SO wrong about France in a nutshell.

 

[idun]

I watched Too Big to Fail the other night.

Glad to see that so many of the actors were up for Emmys, some of the real bankers should have been put in the stocks in Battery Park.

 

In a larger place like Beziers they should surely have people with a bit of savvy working for them who might understand contracts etc. I know my old village was taking loans for some major works, I'll have to ask if they were toxic too. I hope the poisioned Maire hasn't put the village in the caca.

Still, if the top bankers don't get their tonne of flesh then how can they have their huge bonuses? For me some of these top bankers seem to now have disassociated themselves from the human race, a pure greed breed, which maybe most of us do not want.

 

[NormanH]

"on page 5 of our local (Meaux) paper there was a paragraph, explaining

that our ville had such a hole, and taxes will rise to cover it"

Exactly my point.

I will be no surprise to see a lot of posts here from people moaning about the rise in their local taxes.

They don't seem very interested yet though...[8-)]

[breizh]

Won't be next year Normie. Check your calender. The Dwarf will shuffle the provebial deckchairs on the Titanic around, and hope to get reelected (stop laughing at the back). 2013, I'd guess. Wonder what he will promise BNP to back off for 12 months. Cynic? Moi? I married a French politician's daughter.[:-))][:-))]

[mint]

COURSE they're interested, Norman.  Not only interested, they worried and, when the HUMUNGOUS bill dropped through the letter box, they knew exactly why their TF had gone up by over 90%!  That is to say they had their suspicions [+o(]

[cooperlola]

Uninterested? - probably.  Disinterested - probably only around half of us by the look of that map![:-))]

Idun - wheredid you see that?  Do you have Sky?  I've been trying to get it on DVD but it's not even available at the HBO shop yet.[:(]

[idun]

Coops, I don't know which channel it was on, but was on the satellite. I had never heard of it and I was zapping through the channels a few nights ago and it had just started and it looked interesting. When I see  serious actors I like, then I do give things a chance.

Once films are on once, they often show them again and again, so I'll keep my eye out.

[NormanH]

[quote user="cooperlola"]

Uninterested? - probably.  Disinterested - probably only around half of us by the look of that map![:-))]

[:(]

[/quote]

COMMUNE D'ALLONNES

Nom de l'emprunt	DUAL FIXE FLEXI
Type d'emprunt	Structure complexe d'options sur cours de change
Date de début	12/1/2007
Date de fin	12/1/2037
Montant	3 911 000 €
Surcoûts	1 730 000 €
Ratio surcoûts/montant	44.23 %
Banque de contrepartie	GOLDMAN SACHS

[idun]

Spoke to a friend this ce tantôt (there's perhaps a new one for some of you[Www]) and she said that our village was OK. Or maybe the poisoned Maire isn't letting on[:-))]

[ebaynut]

At least that is one thing I don't have to worry about here in the UK with my local council.

They have soOOOO much of the rate payers money they can afford to invest it in Icelandic banks, as clearly they had no other plans for it.

[idun]

My current council tax is only as much as it was in France for hab and fonc. So it makes little difference to me being here or there.

[Val_2]

Obviously I am party to the commune accounts each year and its scary, even for our less than 900 inhabitants who are 65% retirees. When you see the emprunts the dept and the state actually give, the figures get mind boggling but end of the day,everything down to the last paperclip and URSSAF payment is logged. We try to keep the Foncières down, but its devil and deep blue sea end of the day if people want the village to continue its programme of improvements into the 21st century. Dexia one of the names mentioned in our paperwork too, no one knew who they were for some years either.

[cooperlola]

[quote user="idun"]she said that our village was OK. [/quote]

Mine too, but as Norman shows, there are plenty in the Sarthe which are affected.  The one shown has a massive culture centre which puts on lots of interesting stuff and it's not just the commune but the Department and the Region who have supplied money to build it.  Thus I'll bet that in the end it will be more than members of specific communes who have to pay for the debt.  I doubt it will remain as local as it appears now and we'll all end up coughing up, regardless.  I don't know enough about how these things work, unlike Val, but can small communities really ever afford this - especially some of the poorer, rural ones?

We are lucky enough to have a big factory (US owned) in the next village which employs a huge percentage of the local populace but if it were to go bust, the entire local economy could very easily collapse in a heap in an instant.