The crisis as usual is when things are getting worse. Yesterday, Germany - Europe's largest economy - was hit by the weakest demand for bonds since the creation of the Eurozone; France was warned that it might lose its "AAA" rating again, if its debt burden increases; the Central Bank of Athens warned that Greece has only one last chance left to remain the in the Eurozone, and Fitch warned that Austrian banks will reduce their loan to deposit ratio in Central and Eastern Europe. The crisis has reached normal levels.
Ratings firm Fitch Ratings yesterday warned that France's "AAA" rating is threatened by a potential increase in government debt.
Speculations over the increase in the fiscal burden of France began yesterday, after Belgian daily De Standaard informed that the governments in Brussels and Paris are once again discussing the bailout of the "Dexia" group.
"France would have limited room to absorb any new shocks to its public finances without endangering its AAA status - such as a slowdown in growth or new provisions for supporting the banking sector - without endangering its AAA rating", Fitch said.
According to De Standaard, Belgium is trying to determine France to bear a larger portion of the costs of the "Dexia" bailout plan, but the two governments are at odds over the guarantees for the short term borrowing.
"Belgium wanted Paris to guarantee more than had been agreed so far, because France can fund itself at a cheaper rate than our country", De Standaard wrote, without disclosing the source of the information.
In October, "Dexia" was divided by the governments of Belgium, France and Luxemburg, which decided to separate the "bad" assets from the "good" ones, and they granted total guarantees of 90 billion Euros for the next ten years, to help the bank with securing financing.
ALINA VASIESCU (Translated by Co
