The French financial situation is worrisome. It is even worse than Italy whose budget (excluding servicing of the debt) is positive unlike France.  BNP Paribas, Société Générale and Crédit Agricole together hold nearly $ 57 billion in Greek sovereign and private debt, versus $ 34 billion held by the German banks and $ 14 billion at British banks. As of December of last year, French banks also held more than € 140 billion in total Spanish debt and almost € 400 billion in Italian debt. BNP Paribas, Société Générale, Crédit Agricole and Société Générale total debts come to € 4.7 trillion, or a staggering 250% of French Gross Domestic Product compared to $ 5.86 trillion or 39% of the total U.S. Gross Domestic Product for the total debt of the three big U.S. banks (Bank of America, JP Morgan and Citigroup).

In order to avoid the collapse of these French banks, private or public investors are being chased all over but without success. The amount needed to avoid a collapse corresponds to the equivalent of 7% of the French Gross Domestic Product. There's much talk about 'RECAPITALIZATION' or even of 'NATIONALIZATION' but the French State doesn't have money to inject into the banks. So who will pay??? France is counting on Europe, but Germany although prepared to move on recapitalization would prefer it to be done by national treasuries instead of the European Financial Stability Fund (EFSF). In any case, the EFSF can't be big enough to save all banks. The EFSF cannot be a magic solution because its charter does not allow countries that are contributing to it to actually use it at the same time. The likeliest outcome is that France and Germany, via the EFSF, will shoulder the burden of bolstering banks in the periphery of the euro zone and will in turn recapitalize their own banks outside the EFSF framework. But that still doesn't answer the question of where the money will come from in France.      

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