News Column

Obama Pushes Back Against Hollande On BNP Penalty, Russian Warships

June 5, 2014

Brussels (Alliance News) - US President Barack Obama set himself on a collision course with his French counterpart on Thursday, saying he would not intervene in a judicial case involving banking giant BNP Paribas and criticizing French plans to sell warships to Russia.

The comments came just hours before the two leaders were to meet in the French capital Paris, in the run-up to World War II commemoration events on Friday.

French President Francois Hollande has this week defended his decision to intervene in the US judicial case targeting BNP, saying that high economic stakes are involved.

BNP has been negotiating for months with authorities in the US on a settlement to end a criminal probe into alleged payments to Iran, Sudan and other countries targeted by US sanctions.

There have been media reports that US regulators want the bank to pay more than 10 billion dollars, a penalty that is said to dwarf that paid by any of its peers to date.

Hollande warned on the margins of Group of Seven (G7) talks in Brussels that a "disproportionate, unjust" and very large penalty could have "economic and financial consequences on the entire eurozone," since BNP is one of its largest lenders.

He also argued that "jobs, economic activity and financing" are at stake. The eurozone exited recession last year, but has been struggling with sluggish bank lending and high unemployment.

Hollande said he would raise the issue with Obama during their talks in Paris, but the US leader told journalists in Brussels that he would have a "short and simple" answer.

"The tradition of the US is that the president does not meddle in prosecutions," he said. "I do not pick up the phone and tell the attorney general how to prosecute cases."

"Perhaps it is a different tradition than exists in other countries, but it is designed to make sure that the rule of law is not in any way impacted by political expediency," he added. "So this will be determined by US attorneys in discussion with the representatives of the bank."

France has also faced pressure about plans to deliver two warships to Russia, despite international condemnation of its actions in Ukraine. Hollande defended the move in Brussels, saying that Paris was simply living up to contracts signed in 2011.

But Obama said he thought "it would have been preferable to press the pause button."

"I have expressed some concerns, and I don't think I'm alone in this, about continuing significant defence deals with Russia at a time when they have violated basic international law and the territorial integrity and sovereignty of their neighbours," he said.

But Obama added that Hollande's decision to proceed with the deal "does not negate the broader cooperation that we've had," notably when it comes to potential sanctions on Russia.

"On a whole range of issues, we're seeing intense cooperation," Obama added. "The relationship between the US and France has never been stronger."

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Source: Alliance News

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