Dexia complications

Discussion in 'Economy' started by william the wie, Oct 4, 2011.

  1. william the wie

    william the wie Gold Member

    Nov 18, 2009
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    The Franco-Belgian bank is in trouble and purportedly a bailout is in the works but there are so many political cross-currents involved I don't see this as possible. Here are some that I am aware of:

    Dutch speakers vs. French speakers in Belgium. Dexia may be seen as Francophone imperialism, either internally or externally and the old standby as both.

    French and Belgian government investment in the bank represent radically different percentages of GDP.

    If France sticks it to Belgium the whole idea of sovereign debt bailouts may blow up.

    If France does not stick it to Belgium on Dexia then the ruling French party could be facing catastrophic failure in the next election when the bill comes due.

    Yet if Dexia is not bailed out major French banks will be in danger of failing. Am I missing something?

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