By "Punishing" France, The US Just Accelerated The Demise Of The Dollar
Total CEO calls for bigger euro role in oil payments
Oil major Total's chief executive said on Saturday the euro should have a bigger role in international trade although it is not possible to do without the U.S. dollar.
Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.
"Doing without the (U.S.) dollar, that wouldn't be realistic, but it would be good if the euro was used more," he told reporters.
"There is no reason to pay for oil in dollars, " he said.
Total’s de Margerie Sees No Need for Dollars in Oil Purchases
Total SA (FP) Chief Executive Christophe de Margerie said he sees no reason for oil purchases to be made in dollars, adding that it makes sense to expand the use of other currencies in transactions outside the U.S.
“Nothing prevents anyone from paying for oil in euros,” de Margerie told journalists at the Cercle des Economistes conference in Aix-en-Provence, France. “The price of a barrel of oil is quoted in dollars. A refinery can take that price and using the euro-dollar exchange rate on any given day, agree to make the payment in euros.”
The remarks from the head of France’s largest oil company are the latest in a debate sparked by an $8.97 billion fine slapped by the U.S. on French bank BNP Paribas SA (BNP) for transactions carried out in dollars in countries facing American sanctions.
French Finance Minister Michel Sapin said this week that the BNP fine raises questions about the reach of U.S. laws because the bank’s transactions were not illegal in Europe. Sapin said European countries should look for ways to use the euro more frequently and that he will raise the matter with fellow euro-area finance ministers when they meet in Brussels on July 7.
“Shouldn’t the euro be more important in the global economy?” Sapin asked journalists in Paris July 3. “We have to consider the weight of the dollar and the consequences of pricing things in dollars when it means that American law applies outside the U.S.”
De Margerie said today that Sapin’s view is coherent.
“Yes it makes sense,” he said.
It is becoming more serious than anybody have thought. Just too much too wrong moves by US
France Assures Push Against Petrodollar Is Not A "Fight Against Dollar Imperialism"
To complete the French triple whammy offensive against the US Dollar this weekend (first, French central banker Noyer suggesting de-dollarisation; second, French oil major Total's CEO "seeing no reason for the Petrodollar"), French finance minister Michel Sapin says "now is the right time to bolster the use of the euro" adding, more ominously for the dollar, "we sell ourselves aircraft in dollars. Is that really necessary? I don’t think so." Careful to avoid upsetting his 'allies' across the pond, Sapin followed up with the slam-dunk diplomacy, "This is not a fight against dollar imperialism," except, of course - that's exactly what it is... just as it was over 40 years ago when the French challenged Nixon.
Nope - no anti-dollar-imperiliasm here at all...
Single whammy:
NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR
Here is the full google translated segment:
Q. Doesn't the role of the dollar as an international currency create systemic risk?
Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect.
In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar.
Double whammy:
Total’s de Margerie Sees No Need for Dollars in Oil Purchases
Oil major Total's chief executive Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.
"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.
So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.
And now The Triple Whammy
*FRANCE SAYS INCREASING EURO USE IS ISSUE OF 'GLOBAL BALANCE'
*SAPIN SAYS EURO AREA NEEDS TO LEAD DISCUSSION ON DOLLAR USE
*FRANCE NOT FIGHTING 'DOLLAR IMPERIALISM,' SAPIN SAYS (wo shy mention it?)
French Finance Minister Michel Sapin says that now is the right time to bolster the use of the euro in transactions outside the U.S. Sapin speaks in an interview with Bloomberg News in Aix-en-Provence, France.
“We sell ourselves aircraft in dollars. Is that really necessary? I don’t think so,” Sapin says, adding "I think a rebalancing is possible and necessary, not just regarding the euro but also for the big currencies of the emerging countries, which account for more and more of global trade."
“We can avoid the exchange rate risk, and that’s always useful. We can diminish financing costs in pricing more in other currencies,” Sapin says.
“This is not a fight against dollar imperialism,” Sapin says.
“It’s up to Europe, to the euro zone in particular, to lead this argument,” Sapin says.
As The FT reports, Mr Sapin said he would raise the need for a weightier alternative to the dollar with fellow eurozone finance ministers when they meet in Brussels on Monday, although he declined to go into detail about what practical steps might emerge.
U.S. Targets Germany's Commerzbank In Latest Sanctions-Busting Probe
The U.S. is continuing to pursue fines against European banks for continuing to do business with nations it’s sanctioned and the latest target id Germany’s Commerzbank
That’s the latest from Reuters which on Tuesday cited a source with direct knowledge of the regulatory investigations and said that state and federal officials have begun talks with the Commerzbank but there is no sign of an impending settlement. If it does settle, Reuters said it’s likely the bank would face a chance to avoid criminal prosecution in exchange for paying a hefty fine, a so-called deferred prosecution.
News of the probe comes little more than a week after French banking firm BNP Paribas (PARIS:BNPP) pleaded guilty to felony charges in a U.S. court for doing business with Iran and other U.S.-sanctioned countries, including Sudan and Cuba. The bank will pay a record $8.8 billion fine.
Commerzbank is 17 percent owned by the German government, and according to the New York Times is accused by the Washington transferring money through the U.S. for clients Iran and Sudan.
Another big German bank, Deutsche Bank (NYSE:DB), is also being investigated according to Reuters, as well as France’s Credit Agricole (PARIS:CAGR), Societe Generale (PARIS:SOGN) and Citigroup Inc's (NYSE:C) Banamex unit.
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Not even we anticipated this particular "unintended consequence" as a result of the US multi-billion dollar fine on BNP (which France took very much to heart). Moments ago, in a lengthy interview given to French magazine Investir, none other than the governor of the French National Bank Christian Noyer and member of the ECB's governing board, said this stunner at the very end, via Bloomberg:
Here is the full google translated segment:
In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar.
Putting this whole episode in context: in an attempt to punish France for proceeding with the delivery of the Mistral amphibious warship to Russia, the US "punishes" BNP with a failed attempt at blackmail (recall that as Putin revealed, the BNP penalty was a used as a carrot to disincenticize France from concluding the Mistral transaction: had Hollande scrapped the deal, BNP would likely be slammed with a far lower fine, if any). Said blackmail attempt backfires horribly when as a result, the head of the French central bank makes it clear that not only is the US Dollar's reserve currency status not sacrosanct, but "the world" will now actively seek to avoid USD-transactions in order to escape the tentacle of global "pax Americana."
And, the biggest irony of all is that in "punishing" France for dealing with Russia, that core country of the Eurasian alliance of Russia and China, the US merely accelerated the gravitation of France (and all of Europe) precisely toward Eurasia, toward a multi-polar (sorry fanatic believers in a one world SDR-based currency) and away from the greenback.
Or shown visually (as we have ever since 20120).
Meanwhile, somewhere Putin is still laughing.
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