A caisse of the blues

6 December 2002 By Paul Raynes

The French quasipublic bank’s role in the France Telecom bailout is just the latest example of it doing the government s dirty work. But new transparency about the balance between commercial and publicinterest activities will give its incoming boss some hard choices.

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The Caisse des Depots et des Consignations is to lend up to E9bn to a governmentowned entity, ERAP, which will in turn lend it to France Telecom in the context of its refinancing plan. In November, CDC also participated in a placement of Vivendi Environnement shares which allowed Vivendi Universal to finance its bid for control of Cegetel.

CDC has publicly rejected claims by the Caisses d'Epargne that its control of their joint venture Eulia, which in turn controls CDCIxis, was hampering the investment bank's ability to expand. Pointing to the failure of a recent attempt to merge with a Romanian bank, the Caisses d'Epargne had argued that it ought to move up to a majority stake in Eulia.

The French government has until 17 December to decide whether to renew Daniel Lebegue's term of office as chief executive of CDC. Alternative candidates touted in the French press are all either former senior Treasury officials, or have held senior political appointments at the Finance Ministry.

The Caisse des Depots was founded in 1816 to manage the deposits of the growing savings bank movement. In 2000, it merged its investment banking activities with those of the Caisses d'Epargne in CDCIxis. CDC directly holds 43.5% of CDC Ixis, and has a 50.5% shareholding in Eulia, which holds another 53% of CDCIxis. The remaining 49.5% of Eulia belongs to the Caisses d'Epargne.

A caisse of the blues

6 December 2002 By Paul Raynes

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