French President Nicolas Sarkozy announced Monday in a press conference that France was working on a new rescue plan for Greece's flagging economy that would involve voluntary participation of the private sector.
AFP - French President Nicolas Sarkozy said on Monday that France was working with private lenders on a new rescue plan for debt-ridden Greece that will be proposed to its European partners.
"We have worked very hard, the finance ministry has worked very hard with the banks and insurance companies ... on what could be a voluntary participation by the private sector," Sarkozy said.
"We have concluded that prolonging loans over 30 years, and putting them on the level of European loans indexed on Greek growth, would be a system that all countries might find useful," he told reporters.
Sarkozy said he had also discussed the plan with Germany's Chancellor Angela Merkel, who had previously backed a now abandoned compulsory scheme to oblige private lenders to help restructure the debt owes to them.
"The principle is the voluntary participation of the private sector. If it was not voluntary it would have been seen as a default, with a risk of a cascade of immense catastrophes," Sarkozy explained.
Speaking at a major press conference on his economic record, 10 months before he is due to seek re-election, Sarkozy said he "hoped" that fellow European Union governments would back the French plan.
"We won't let Greece fall. We will defend the euro. It's in all of our interests," he insisted.
The plan, designed to bail out Greece while limiting the political and economic risks to other EU economies, would reportedly see private lenders reinvest 50 percent of Athens' loan repayments in new 30-year loans.
Another 20 percent of the repayments would go into a fund to act as a guarantee to make this new Greek debt appear more secure.
Sarkozy also dismissed as "insane" calls from some politicians, such as far-right leader Marine Le Pen, for Paris to leave the euro, arguing that a new franc would be weak and France would see its euro-denominated debts triple.
Date created : 2011-06-27