French bank rescue plan passes first parliamentary hurdle
The French government's bank rescue plan passed its first hurdle late Tuesday as lawmakers in the National Assembly approved the 360-billion-euro (490-billion-dollar) measure by a vote of 224 to 23, dpa reported.
The plan, announced Monday by President Nicolas Sarkozy, will make available up to 320 billion euros to guarantee interbank loans and another 40 billion euros for the recapitalization of struggling banks.
Opposition Socialist lawmakers said they supported the plan but abstained from voting because they said it only addressed the financial crisis, not the economic crisis.
Many analysts believe that the plan will not prevent the French economy from sliding into recession, and that other costly measures designed to stimulate the economy would probably be necessary.
Communist deputies voted against the plan and had delayed the vote by proposing a series of amendments.
With Sarkozy's UMP party and its allies holding a large majority in the 577-seat chamber, the proposal was always certain to pass. It will now be sent to the Senate for another vote on Wednesday.
Earlier Tuesday, Sarkozy met with the heads of large banks and insurance companies to discuss the rescue plan.
According to a statement released by Sarkozy's office, the bankers agreed to make loans available to companies for investment and cash flow, according to corporate needs.
In addition, the banks also said that their boards of directors would adopt a "code of good conduct" regarding the salaries of their senior executives as soon as possible.
Sarkozy has vowed to do away with exorbitant severance payments, especially for executives who take unwarranted risks.
Budget Minister Eric Woerth, who participated in the meeting, told France Info radio, "The message was passed. Now the banks must do their jobs - lend to the real economy, to French businesses, the money that is needed."