French bank rescue plan to be put before Parliament

Oct 14, 2008, 11:15 GMT

Paris - French lawmakers will begin examining later Tuesday the government's bank rescue plan, which could cost as much as 360 billion euros (490 billion dollars), French media reported.

The lower house of the Parliament, the National Assembly, was to open debate on the measure in the afternoon, with a vote foreseen for Tuesday evening.

The plan, announced Monday by President Nicolas Sarkozy, would make available up to 320 billion euros to guarantee interbank loans and another 40 billion euros for the recapitalization of struggling banks.

Opposition Socialist lawmakers said they supported the plan but would abstain from voting because it only addressed the financial crisis but not the economic crisis. Communist deputies said they would vote against it.

Analysts believe that the plan will not prevent the French economy from sliding into recession, and that other costly measures designed to stimulate the economy would probably be necessary.

Earlier Tuesday, Sarkozy met with the heads of large banks and insurance companies to discuss the rescue plan.

Budget Minister Eric Woerth, who participated in the meeting, told France Info radio, 'the message was passed. Now the banks must do their jobs - lend to the real economy, to French businesses, the money that is needed.'

The French Senate is expected to take up the measure on Wednesday, and it is expected to be passed into law before the end of the week.