ECONOMY

Eurozone should be ready for possible block to Greek plan

Euro zone policymakers must be ready to respond if Greek lawmakers block the country’s new austerity measures, Germany’s deputy finance minister said on Monday.

Joerg Asmussen said he expected the Greek parliament to vote through the 28 billion euro austerity package — essential for clearance of the next tranche of Greece’s EU/IMF bailout programme — but Europe needed to be prepared for the worst.

“(A rejection) isn’t Plan A, or the most likely outcome, but the euro zone and its financial sectors need to make preparations,» Asmussen told a conference in Berlin.

European leaders are racing to agree terms on a further bailout for Greece, including a contribution from private banks which would agree to a «voluntary» rollover of their Greek debt.

French President Nicolas Sarkozy said on Monday that banks are ready to help Greece by accepting a significant debt rollover.

French banks are among the biggest holders of Greek sovereign debt – some 15 billion euros – and Sarkozy urged other countries to follow suit.

Sarkozy said the plan being worked out between French treasury officials and bankers would involve reinvesting debt held by French banks in new securities over 30 years.

A report in Le Figaro newspaper says that the banks are ready to re-invest, 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 told

a news conference.