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Economy

BNP Paribas And Eric Holder's "Nuclear Option"

A reported multi-billion-dollar U.S. fine against BNP Paribas, the eurozone's biggest bank, puts the very heart of transatlantic relations at risk, writes France's leading business daily.

France's leading bank
France's leading bank
Nicolas Barré

PARISIt is a declaration of war. An unprecedented blow to transatlantic relations so long based on trust and common values. This open affront to Europe both reveals and deepens the continent's growing weakness.

By threatening to cut access to the dollar for France's BNP Paribas — the eurozone's largest bank — the United States has crossed more than a red line, as it pushes for an unprecedented $10 billion penalty for the bank's alleged violation of an embargo against Iran and other countries.

In the economic and financial order, this amounts to the proverbial nuclear option.

And it was taken against allies, moreover — because the U.S. would never consider this against its Chinese creditor. And how can we not see it more specifically as a very deliberate act of aggression towards France, which, from Libya to Mali or Syria, has yet acted as a model ally to Washington?

It is crucial that Barack Obama’s visit on the D-Day beaches this week brings back reason in a case that has become surprisingly irrational. It is important to measure the strength of the earthquake that would hit the world if one of its five most active banks no longer had access to the dollar. The cataclysm would be global.

The bolting of this affair is undoubtedly linked to the American political context. Public opinion is decidely angry towards banks and a federal administration that has been permissive with them.

So this is why U.S. Attorney General Eric Holder is playing politics. This activist, who enjoys being filmed in his office as a righter of wrongs, announced a few days before leaking the name of the French bank, that he wouldn’t hesitate targeting “the largest financial institutions” because they are not “above the law.”

His campaign, wrapped in the central principles of law, screams instead of a media strategy while Obama, the hesitant figure in the White House, is standing idly by, as is so often the case.

These political maneuvers must cease. The French bank must pay for its mistakes, as many other banks have done before. But nothing justifies the magnitude of the sanctions suggested, especially considering the much heavier turpitudes committed by the American banks themselves.

Double standards are unacceptable. There is no worse hypocrisy than filling a state’s coffers with the money of others, when this state let the biggest crisis since the 1930s happen. The world should be holding the U.S. accountable, and not the opposite!

If the White House does not act very soon — it is a matter of days, not weeks — the Federal Reserve, guarantor of the integrity of the financial system, though surprisingly silent until now, must end the game. The president of the European Central Bank, Mario Draghi, must come to the fore to remind it of it. It is time for the building tensions to be released, and let reason return.

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