‘Toxic debt’ fear for mairies

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.