France is not one of the eurozone countries considered to be at immediate risk in the current crisis. But more than five thousand local authorities are having serious problems servicing their debt. Some say they will stop paying the interest on their loans.
Dexia, the Franco-Belgian banking group brought to its knees amid the European debt crisis, has provided loans to municipalities across France for decades. The town of Unieux had loans from Dexia that were linked to the Swiss franc. As the franc gained against the euro, interest payments soared: they are up 800,000 euros this year. Unieux is suing the bank for failing to provide adequate information about the risks involved. But will the case succeed and could it set a precedent?
