French banks are ready to help troubled Greece by accepting a significant debt rollover, President Nicolas Sarkozy said Monday, a move that could push other banks to pitch in to the Europe-wide effort to keep Athens from defaulting.
Sarkozy said the plan would see banks reinvest their Greek debt holdings into new bonds over 30 years. That would give Greece valuable funding to manage its huge debt load and buy it time to reform its economy.
French banks are among the biggest holders of Greek sovereign debt -- some (euro) 15 billion ($21 billion) -- with Germany's financial sector also heavily exposed, to the tune of (euro) 16 billion ($22.7 billion), according to the Bank for International Settlements.
Sarkozy urged others to follow the example of the French plan, which was presented Monday at an international meeting in Rome where banks and financial institutions discussed what the private sector can do to save Greece from default.
A report in Le Figaro newspaper says that the banks are ready to reinvest, or roll over, up to 70 percent of the Greek sovereign debt they hold. Asked whether the report was correct, Sarkozy said "yes."
"It's a system that other countries could find useful," he said of the plan.
"The idea is that we won't let Greece fall, we will defend the euro, it's in the interest of us all," he said at a news conference.
A Greek default would have grave consequences on all 17 countries that use the euro and rock markets worldwide. European leaders are trying to get the private sector to take part in a new rescue package under discussion for Greece.