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France: Second Greek bailout plan might only be ready in September

Business Materials 6 July 2011 13:53
A second Greek bailout plan might only be ready for September, new French Finance Minister Francois Baroin said Wednesday, confirming reports that the European Union is giving itself more time to hammer out a plan with private investors.

A second Greek bailout plan might only be ready for September, new French Finance Minister Francois Baroin said Wednesday, confirming reports that the European Union is giving itself more time to hammer out a plan with private investors, DPA reported.

"In the weeks to come we will start discussing the next support plan for Greece...We must be ready for September," Baroin told France's Europe 1 radio.

Last week EU members signed off on the last 12-billion-euro (17-billion-dollar) tranche of Greece's first 110-billion-euro rescue package, saving the Mediterranean country from bankruptcy.

But Greece needs up to 120 billion euros more to remain solvent beyond 2012.

Leading eurozone banks were meeting in Paris Wednesday to discuss how the private sector could contribute to a second plan, by rolling over part of their holdings of Greece's sovereign debt.

The French government and banks have come up with a proposal, which would see private lenders reinvest 70 per cent of loans repaid by Athens when they fall due, with 50 per cent of the amount reinvested going into loans with a term of 30 years.

The proposal would amount to banks rolling over half their holdings of Greek debt due to mature in the next three years for 30 years.

That option was discredited Monday by leading credit rating agency Standard & Poor's, which said it considered that the plan "would likely amount to a default."

The Financial Times said Tuesday the banks would discuss a new proposal that would "sweeten the terms" of the French plan.

The issue will dominate discussions Thursday in Berlin between Baroin and his German counterpart Wolfgang Schaeuble.

"We will discuss it (a second bailout) with the Germans, we have several weeks ahead of us," said Baroin, who became finance minister last week after Christine Lagarde was appointed head of the International Monetary Fund.

The EU had previously been expected to come up with a plan this month.

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