French say oui to Greek debt deal but still a non on Irish interest rate
The French government has stuck a deal with Greece and agreed to rollover Greek debt for 30 years.
But President Nicolas Sarkozy has yet to climb down on his resistance to a 1pc cut in the European part of our €67.5bn in bailout loans.
The announcement was made in Paris as the Greek government fights to coax backbenchers to back the austerity measures for the southern European country which faces bankruptcy.
Despite the new deal, financial markets are still watching the Greek tragedy anxiously.
Mr Sarkozy suggested the French solution to the Greek problem could be a model for other countries.
“'We concluded that by stretching out the loans over 30 years, putting (interest rates) at the level of European loans, plus a premium indexed to future Greek growth, that would be a system that each country could find attractive,' he said.
It is understood that French banks will reinvest 70pc of proceeds when Greek bonds fall due and that Germany is examining the proposition.
But any deal is contingent on the Greek parliament's approval this week of a five-year austerity plan and legislative changes to push through privatisations.
Without full approval, Europe and International Monetary Fund say they will not release the latest tranche of the €110bn bail-out agreed last year and this could lead to a bankruptcy in Greece and trigger a Europe-wide crisis.