French President Nicolas Sarkozy said Monday his government and the private banks reached an agreement on backing the new bailout package for Greece.
“The debt rollover plan, reached voluntarily with French private creditors, needs to be approved by the other members of the European Union,” Sarkozy told a news conference here.
Under the plan, the creditors will have to reinvest 70 percent of the Greek debt installments when they are due and turn 50 percent of the reinvestments into new loans payable over 30 years instead of five, he revealed.
The plans aims to make investment in the new loans more attractive for the creditors, Sarkozy said, voicing hope that the plan will be backed by the other EU member states.
The French Ministry of Finance worked hard with national banks and insurance companies to develop the new proposals.
“France will not let the Greek economy collapse and will do its utmost to protect the Euro-zone because this will sever the interests of all of us,” he added.
Sarkozy’s announcement followed a parliamentary battle between the Greek government and backbenchers to pass a crucial austerity plan to avert bankruptcy.
The EU and the International Monetary Fund made their agreement to offer a fifth financial aid package – involving Euro 12 billion – conditional on the endorsement of the austerity plan by the Greek government.