{"id":39929,"date":"2018-10-31T06:36:15","date_gmt":"2018-10-31T11:36:15","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39929"},"modified":"2018-10-31T06:36:15","modified_gmt":"2018-10-31T11:36:15","slug":"whys-france-so-worried-about-italys-showdown-with-brussels","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39929","title":{"rendered":"Why\u2019s France so Worried about Italy\u2019s Showdown with Brussels?"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/10\/30\/france-worried-about-italy-showdown-with-eu-brussels\/\">Why\u2019s France so Worried about Italy\u2019s Showdown with Brussels?<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The French megabanks are on the hook.<\/strong><\/p>\n<p>France was just served with a stark reminder of an inconvenient truth: \u20ac277 billion of Italian government debt \u2014 the equivalent of 14% of French GDP \u2014 is owed to French banks. Given that Italy\u2019s government is currently locked in an existential blinking match with both the European Commission and the ECB over its budget plan for 2019, this could be a big problem for France.<\/p>\n<p>On Friday, France\u2019s finance minister, Bruno Le Maire, <a href=\"https:\/\/uk.reuters.com\/article\/us-eurozone-france\/euro-zone-not-prepared-enough-to-face-new-crisis-french-finance-minister-idUKKCN1N2099?utm_source=applenews\">urged<\/a> the commission to \u201creach out to Italy\u201d after rejecting the country\u2019s draft 2019 budget for breaking EU rules on public spending. Le Maire also conceded that while contagion in the Eurozone was definitely contained, the Eurozone \u201cis not sufficiently armed to face a new economic or financial crisis.\u201d As Maire well knows, a full-blown financial crisis in Italy would eventually spread to France\u2019s economy, with French banks serving as the main transmission mechanism.<\/p>\n<p>France isn\u2019t the only Eurozone nation with unhealthy levels of exposure to Italian debt, although it is far and away the most exposed. <a href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2018-10-29\/europe-is-too-exposed-to-let-italy-go\">According to<\/a> the Bank of International Settlements, German lenders have \u20ac79 billion worth of exposure to Italian debt and Spanish lenders, \u20ac69 billion. In other words, taken together, the financial sectors of the largest, second largest and fourth largest economies in the Eurozone \u2014 Germany, France and Spain \u2014 hold over \u20ac415 billion of Italian debt on their balance sheets.<\/p>\n<p>While the exposure of German lenders to Italian debt has waned over the last few years, that of French lenders has actually grown, belying the ECB\u2019s long-held claim that its QE program would help reduce the level of interdependence between European sovereigns and banks.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why\u2019s France so Worried about Italy\u2019s Showdown with Brussels? The French megabanks are on the hook. France was just served with a stark reminder of an inconvenient truth: \u20ac277 billion of Italian government debt \u2014 the equivalent of 14% of French GDP \u2014 is owed to French banks. Given that Italy\u2019s government is currently locked [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[95,5660,233,282,2535,285,333,1464,661,662,4255],"class_list":["post-39929","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brussels","tag-don-quijones","tag-ecb","tag-european-central-bank","tag-european-commission","tag-eurozone","tag-france","tag-italy","tag-qe","tag-quantitative-easing","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39929"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39929\/revisions"}],"predecessor-version":[{"id":39930,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39929\/revisions\/39930"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}