Following the statements by Christian Estrosi (see our article from May 27) indicating that he would take legal action against Dexia concerning Nice’s last toxic loan, several reactions followed. In addition to the ones we have already published, we include the response from David Nakache (PS – local representative for Arnaud Montebourg). The topic is on the agenda for next Monday’s City Council meeting and there is no doubt it will lead to a heated debate between the majority and the opposition.
The balance of the loan in question (No. 448), based on the exchange rate between the euro and the Swiss franc, still amounts to 19 million euros today.
According to David Nakache, Christian Estrosi makes three false claims:
Firstly, by declaring that the city’s finances are in order, which is false, as a large portion of Nice’s debt has not been reduced but merely transferred to the Nice Cรดte d’Azur Metropolis, which is itself over-indebted (more than a billion euros in debt). “Can he claim to have sorted out the finances of the Nice Cรดte d’Azur Metropolis?” questions David Nakache.
Secondly, by stating he wants to cancel the city’s last toxic loan before the end of his term. However, this is not the last one. Let him explain how and within what timeframe he will settle the two other existing structured loans!
Thirdly, by asserting, also during his press conference, that in the event of a favorable judgment “we will save 18 million euros”. Yet, the local PS representative denounces this claim. And to understand the situation better, some local history is needed:
In June 2010, when the opposition, represented by Yann Librati, the PS president of Nice’s finance committee, denounced the presence of toxic loans in the city’s finances, taken out during the Peyrat era, and asked Christian Estrosi to renegotiate them or sue Dexia, he denied the problem. He acknowledged that there are structured loans, but even dismissed the term “toxic” in the city council! Then, after persistent pressure, he admitted the reality of their danger… but still did nothing.
Under political and media pressure, he finally renegotiated loan 448 by freezing it, converting it temporarily into a fixed-rate loan.
The Citizen Audit Collective and Anticor then put pressure on the mayor of Nice, urging the necessity of legal action before the statute of limitations expired, which would make any action impossible.
In the end, Christian Estrosi relented and finally decided to sue Dexia, loudly proclaiming that he would save 18 million euros this way.
But, in reality, there is a figure that Mr. Estrosi has never communicated to the people of Nice: the amount of interest they have paid to Dexia since the loan was taken out!
Certainly, it could be said that upon taking office, he did not know. But once the opposition warned him of the risks and the imperative necessity to exit toxic loans, he can no longer say he was unaware! What is the amount that the people of Nice have paid in interest repayments to Dexia since June 2010?
Moreover, the freeze on loan 448 ends on August 1, 2013. The legal action the mayor wants to initiate is not suspensive, meaning that until a judgment is rendered, the city of Nice will have to repay the loan and the interest to Dexia. If the financial situation does not evolve, meaning if the exchange rate between the euro and the Swiss franc remains the same, it won’t be a 5% interest rate that needs to be paid, but at least 15%! Ultimately, it’s not 18 million euros we will save, but 18 million euros minus the exorbitant interest that will be paid until the judgment is pronounced. And we know that such legal proceedings can last a long time: Seine-Saint-Denis obtained a judgment against Dexia after… two years of proceedings!
We are well aware that Christian Estrosi inherited the toxic loans taken out by Jacques Peyrat. But, from the moment the opposition publicly called on him to exit them, in June 2010, why wait until June 2013 to act? Why waste three years?
We have constantly asked Christian Estrosi for complete transparency on this matter. Will he do so today by answering our questions:
When and how does he intend to settle the remaining toxic loans, independently of the legal action against loan 448?
How much has the loan 448 cost the City of Nice, and therefore the people of Nice, since it was taken out?
How much has loan 448 cost the people of Nice since the opposition requested the Mayor to exit it, in June 2010?
What amount will the people of Nice pay in interest rates from the end of the freeze on loan 448, that is, from August 2, 2013?
To be continued…
