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The origin of this cross-shareholdings can be traced to the period 1986-1988 during a time of "cohabitation" in French government between a social president, Francois Mitterand, and a more conservative Prime Minister, Jacques Chirac. Afraid of the inability of the French weak capital markets to absorb large quantity of shares domestically and hesitant to open ownership of France's "crown jewels" to foreigners, the French government encouraged large privately owned firms to soak up the new shares offered during the privatizations.
In 1995, the country's real GDP growth was 2.1%, sinking to 1.5% in 1996...
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