In 1996, the Government of Prime Minister Alain Juppé attempted privatisation of the GAN insurance company and of its financial division, CIC, made up of 11 regional banks. However, the move failed in the face of fierce opposition by both trade unions and local politicians. Now in autumn 1997, the left-wing Government led by Lionel Jospin, in order to save GAN-CIC from bankruptcy, has in turn agreed to conditions imposed by the European Commission and has reinstated the privatisation programme of the group on the agenda.
The left-wing Government led by Prime Minister Lionel Jospin is determined to push ahead with the privatisation of the GAN-CIC insurance and finance group, which had been unsuccessfully launched by the former Juppé Government.
In 1996, the Government of Prime Minister Alain Juppé attempted privatisation of the GAN insurance company and of its financial division, CIC, made up of 11 regional banks. However, the move failed in the face of fierce opposition by both trade unions and local politicians. Now in autumn 1997, the left-wing Government led by Lionel Jospin, in order to save GAN-CIC from bankruptcy, has in turn agreed to conditions imposed by the European Commission and has reinstated the privatisation programme of the group on the agenda.
The French state owns 80.5% of GAN, which in turn owns 93% of CIC. The group is in a parlous financial situation, as a result of several years' allegedly disastrous management which has led the company to the brink of bankruptcy, and the privatisation should save the group from receivership. The Juppé Government had planned to grant FRF 20 billion to GAN - FRF 11 billion as a capital injection and FRF 9 billion to write off losses in the real estate sector - and in exchange it had to agree to the privatisation requested by the European Commission. The new Government's revived privatisation plan is in line with the commitments made by the Juppé Government to the Commission. The French Parliament has still to take a decision on the plan, and the detail of its implementation is still to be set out, in particular as to whether GAN should keep a financial stake in CIC. This plan is just one in a vast wave of restructuring and concentration sweeping across the French financial sector, as a result of several sensational bankruptcies which have included Crédit Lyonnais and Comptoir des Entrepreneurs.
The trade unions resent what they see as a lack of openness by the Government about its decision, and they are afraid that the European Commission will demand internal restructuring of the group. The current redundancy plan provides for 591 job losses out of a total workforce of 8,743 in France.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), Privatisation of the GAN-CIC group, article.
