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French press review 8 August 2011

The financial markets and global jitters are making headlines across France, even before European stock markets opened.

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Libération simply headlines “Crash?” because, the paper says, the fact that US debt was downgraded on Friday is sparking fears worldwide and could have a domino effect.

As an example why they feel the global financial crisis isn't over, it publishes an article on a town in Rhode Island in the United States called Central Falls. Last week that town declared bankruptcy, just as the US Congress dodged default by finally agreeing on how to raise the country's debt ceiling.

When a town declares bankruptcy it’s momentarily protected from its creditors - meaning it doesn’t have to pay its debt for now. So far, few towns that have had to declare bankruptcy. But the paper says that could change.

Le Figaro headlines, "Sarkozy and Merkel set out to tackle the crisis.” The paper is slightly more optimistic than Libération. German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed that they want Greece’s second bailout package in place by September.

An announcement aimed at showing leadership and reassure markets. The paper does however say that this coming week is going to be risky business for investors.

Communist newspaper L’Humanité takes a different stab at the crisis. It says that amid this crisis, you should maybe consider changing sides. It blames the crisis on capitalism, saying capitalist countries are prisoners of financial markets, unemployment rates and “unfair fiscal policy".

They might not be changing political direction, but they are certainly changing their approach. A lot of companies have pulled some of their investments from the stock markets and put their money into the bank.

According to Le Figaro, the Bank of New York Mellon saw cash deposits increase so much, it decided to charge a type of rent for any deposit over 50 million dollars. Normally, the bank would have to pay interest on customer deposits.

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