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.
Speaking at a major press conference on his economic record, ten 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 fund to act as a guarantee to make this new Greek debt appear more secure. (“Zero coupon” debt securities whose interests will not be charged as they arise, but at maturity.) (FO)