23.1 C
Bucharest
September 15, 2019
WORLD

French banks ready to roll over Greek loans

Protestors were again out on the streets in Athens on Monday and a two-day national strike is planned for Tuesday.

PARIS/ATHENS – French President Nicolas Sarkozy says his country’s banks would help Greece by giving it 30 years to repay. France’s Figaro newspaper said banks are ready to relend – or roll over – 70 per cent of loans they hold. The plan is being worked out by the French government and bankers. France’s banks hold around 15bn euros in Greek government debt.

Greece, which has not yet exhausted all its first 110bln euro bailout, is already standing by for further rescue loans expected to be up to 120bn euros.

However, the German government and others have been pressing for banks and other private-sector lenders to Greece to be involved this time round.

German banks are reported to be very interested in the French model being discussed.

A group of international bankers are currently meeting eurozone officials in Rome to discuss the crisis.

The matter is fraught because credit rating agencies, who determine the credit-worthiness of borrowers, have already said they will view any roll-over of loans by banks as a technical default, something that is tantamount to bankruptcy. The head of the eurozone’s rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a default rating.  European policymakers – notably the European Central Bank – are also concerned that the move could force Europan banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

This week is another crucial one for the indebted country. The Greek parliament will discuss a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros.

The ruling party has 155 seats in a 300-seat parliament and polls suggest the proposals are opposed by three quarters of Greece’s 11 million population.

On Sunday, Greece’s deputy prime minister said some of the key cuts and fundraising measures may not be passed.
Protestors were again out on the streets on Monday and a two-day national strike is planned for Tuesday. Previous demonstrations have culminated in riots.

They have a larger exposure to other struggling eurozone economies, particularly Ireland and Spain.

Related posts

Ministry of Foreign Affairs : The U.S. Senate report on secret CIA jails contains no reference to Romania”

Nine O' Clock

Reims building collapse after blast ‘kills two’

Nine O' Clock

EU and China plan informal talks over trade row

Nine O' Clock

Leave a Comment