US regulators could impose a record-breaking fine of $10 billion (€7.34 billion) against BNP Paribas. France will call the Transatlantic Trade and Investment Partnership (TTIP) into question if US threats turn into action. EurActiv France reports.
A fine of almost $10 billion could hit Europe’s number one bank. BNP Paribas has been accused by the US authorities of evading US sanctions relating to Sudan, Iran and Cuba. President of France François Hollande, has already sent Barack Obama a letter pertaining to the affair, and spoke with him at the G7 in Brussels on Thursday (June 5).
In a letter sent in April, François Hollande emphasised the disproportionate nature of the sanctions brought against the French bank and the greater damages they would inflict on the European economy.
The European Commission has not yet reacted. When questioned by EurActiv France, the Commission said it had no comment about the affair.
The President of the Eurogroup, Jeroen Djisselbloem, believes that the sanction envisaged by the American authorities is too high.
“If a bank has messed up they should be fined, don’t get me wrong, but the height of the fine seems to be over excessive and it’s not helping the recovery of the banks, that’s the kind of figures we’re now talking about,” said Djisselbloem in a CNBC exclusive interview. A major problem is that sanctions brought against Europe’s top bank are seen as an attack on the eurozone as a whole.
Hollande described the potential sanctions as an “injustice” and “disproportionate”, and warned on 5 June that such decisions could have negative repercussions on TTIP negotiations.
“I am well aware of what American justice is, and I respect it. It is independent, but there is a relationship between France and the US, a partnership, and nothing should be allowed to compromise it,” stated Hollande before the G7 summit.
The French President wants to maintain good relations with the US authorities. “We are in talks, it is true, we have good relations with the US and we want to keep them,” he said.
Barrack Obama stressed the strict divide between political and judicial powers in the US.
“The tradition of the United States is that the president does not meddle in prosecutions,” Obama said during a news conference after the G-7 summit.
French government stand united
Laurent Fabius, French Minister for Foreign Affairs, has echoed Hollande. He believes the sanctions that the US seeks to impose on BNP are not suitable.
“If there is a mistake, it is normal to impose a fine, but the fine must be proportionate and reasonable. These amounts are not reasonable,” he said on French TV.
He argues that transatlantic negotiations are at stake due to a lack of reciprocity.
“The trade partnership can only be established if it is based on reciprocity. Here we have an example of an unjust and unilateral decision. It is a serious problem”, said the politician.
Michel Sapin, Minister for Finance, did not mince his words and stated that the BNP Affair would have serious consequences.
“This could affect ongoing discussions on the free trade treaty,” said Sapin.
French Greens raise the alarm
The negative repercussions of the BNP affair on TTIP negotiations have raised concerns among the Greens.
“It is with amazement that the Greens heard how the French President was willing to sign the free trade agreement if US authorities were to drop legal proceedings against BNP,” wrote the political party in a communiqué.
The Greens claim no exception should be made for BNP Paribas, who should abide by the law.
According to them, the French President has misplaced priorities. In the context of TTIP talks, the head of state should be trying to protect French citizens, and not the banks.
“The Green Party is happy that the President will finally approach the treaty with caution, but it wants to stress that the treaty, which has been negotiated in secret between the Commission and the US State Department, must be rejected. It is not a question of giving preference to any company, but to defend the general interests of French and European citizens,” they said.
Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
If the treaty is signed, it will affect almost 40% of world GDP. Transatlantic trade is already the highest in the world. Trade between the US and the EU of goods and services accounts for approximately €2 billion per year.
The deal could save companies millions of euro and create thousands of new jobs on both sides of the Atlantic. The average European household could save €545 per year and European GDP could increase by nearly 0.5%.
Brussels and Washington want to conclude the ambitious negotiations and seal the deal by the end of 2014.