(FORTUNE Magazine) – One of the costliest and most embarrassing sagas in the annals of French business is finally drawing to a close: Credit Lyonnais will be privatized this summer.

Once the largest bank in Europe, the state-run bank foundered in the mid-1990s after a series of scandals and bad loans cost it billions. But the government of Francois Mitterrand decided that the bank was just too big to fail: One of the pillars of the state, it had its fingerprints all over French industry.

So, beginning in 1994, France spent $25 billion to save the troubled bank. Privatization is the next step. In the first stage of that process, the government--now led by Jacques Chirac--will solicit bids to form a group of core shareholders who will collectively own a 33% stake. (So far at least nine financial groups have applied for stakes, including Paribas, itself a takeover target, and three European groups.) In stage two, the remaining shares will be offered to the public. The state will keep 10%. Early estimates predict that $6 billion or so will flow back to the state, a rather modest return on a $25 billion rescue.

Consider what else France could have done with the money. Take, for example, Mitterrand's monumentalist oeuvre, examples of which now dot the Parisian landscape: the Louvre pyramid, the national library, the Grande Arche de la Defense--all were built for a relatively measly $5.2 billion. What about the tunnel under the English Channel, considered one of the great engineering marvels of this century? A snip at $15 billion. Or, closer to a Frenchman's heart, wine and roses: The Credit Lyonnais bailout cost as much as the value of nearly five years' worth of wine exports and $7 billion more than the health and agriculture budgets combined. And remember the Marshall Plan, which helped to rebuild Europe after World War II? France got $18.5 billion in American largesse (in 1998 dollars).

Credit Lyonnais seems to recognize the PR hurdles ahead. Its new ad campaign announces, in a most un-Gallic confessional mode, that "We owed you a new bank." "Owe" is the word.

--Anne Faircloth