As the American authorities announced a record penalty on Monday against BNP Paribas for violating United States rules on trading with blacklisted countries, the French political establishment had an unusual reaction: silence.Thus writes Liz Alderman in a New York Times story to which one is tempted to react to with biting irony: "So, Messieurs les Français, you finally got him, the U.S. president you dreamed of — the one who like the visionary Europeans is against bankers and other dirty capitalist pigs. Ain'tcha happy?!" Having said that, we must remember that Obama's outstanding, second-to-none smart diplomacy is nothing to laugh at.
American prosecutors obtained most of what they fought for, but financial authorities here are warning of a potential negative consequence for the United States.
The dollar clearing at issue in the BNP Paribas case was conducted in the United States. But, said a person with direct knowledge of the negotiations, there is concern that using dollars in international trade could ‘‘trigger risks even if you do things outside the United States, because one day the dollar you used may be seen as an opening for an extraterritorial application of U.S. legislation.’’‘‘That means that using the dollar is now perceived as less safe than before the episode, and it will probably reinforce the willingness of many countries to trade as much as possible in other currencies,’’ the person added.Nor will the French government easily forget the episode. French officials are still upset that American prosecutors appeared to be imposing a standard of justice on foreign banks that has not been applied to American financial institutions.
… ‘‘There is a perception that France was targeted,’’ the French official said.
… France could turn up the heat on the United States on other fronts, especially in negotiations underway on an American-European trade deal. ‘‘It will probably mean that the French attitude will be even tougher,’’ said the French official close to the discussions.Intensifying French resistance to the deal could undermine the European Commission’s ability to champion trans-Atlantic trade, Famke Krumbmuller, a London-based analyst for the Eurasia Group, wrote in a recent note to clients. But those talks are only limping along as it is, and increasingly look doubtful to advance significantly during the Obama presidency.Also unclear is how the American action will ricochet at a European level. The European Commission has already imposed hefty fines on Microsoft and other large American technology companies for violating anti-trust behavior in Europe’s backyard.Given that the financial penalties by the American authorities against not only BNP, but other European banks, have been eye-popping, ‘‘the temptation may be there to also raise the level of the fines in Europe,’’ Mr. Godement said, ‘‘and we could get into a kind of tit-for-tat war, which has the added advantage of replenishing public coffers.’’Whatever the softening of the penalties, the BNP affair will sting in France. ‘‘This amounts to targeting probably the closest ally that the U.S. has had in Europe over the past four to five years,’’ Mr. Godement said. ‘‘It is very disquieting.’’