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‘Toxic debt’ fear for mairies

Around 5,000 public bodies around France are said to have taken out debts which they will struggle to repay

THOUSANDS of local authorities took out “toxic” loans in the period leading up to the financial crisis, according to Libération.

In a story taken up by most of the French press today, the national says it has seen a confidential document which suggests around 5,000 public bodies, like local mairies, regions and departments or even hospitals may face “ruin” because of soaring costs of loans taken out via Dexia, a bank specialised in public finance.

It has published a map hereof bodies which it claims are affected by the loans, which it says have incurred surcoûts (“extra costs”) of up to 20% or more.

The loans have become “toxic” because their rates are highly variable and linked to such volatile figures as the euro and Swiss Franc exchange rate, Libération said.

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