Euro Crisis: France may be next to fall

10% of French banks’ capital – €50bn – is exposed to the sovereign debt of Portugal, Italy, Greece and Spain, the so-called Pigs countries.

SHOOT: Portugal, Spain and Italy are also a mess [along with Hungary, Ireland and others]. Once one of the big european dominos fall it's over.

clipped from www.fin24.com Johannesburg - The next European country that could become immersed in a debt crisis is the second largest economy in the region, France. Henk Viljoen, head of fixed-interest investment at Stanlib, says just over 10% of French banks’ capital – €50bn – is exposed to the sovereign debt of Portugal, Italy, Greece and Spain, the so-called Pigs countries. Banks in the Netherlands have exposure of almost 19% of their capital; this is estimated at €20bn. If the Pigs debt crisis is not choked off it could have a devastating effect on the whole region’s banks, says Viljoen. The European banks are estimated to have about €182bn exposure to Pigs sovereign debt, while that of the banks in the US and Japan is about €23bn. France represents 21.4% of the eur zone economy and Germany 26.9%. Viljoen says a renewed financial crisis in Spain and Italy would reverberate throughout the whole region.