French banks and insurers will propose to their boards that all of the Greek debt they hold maturing by 2020, worth about 15 billion euros, be involved in a private sector bailout, Finance Minister Francois Baroin said.
The minister held talks on Thursday with Bank of France Governor Christian Noyer and executives from French insurance companies and banks to discuss the sector’s involvement in the bailout, agreed by euro zone leaders last week in Brussels.
“The insurance companies and French banks confirmed to the minister that they will propose to their boards participating in the Greek support plan…up to the totality of their Greek exposure maturing before 2020, that is to say about 15 billion euros,» a statement from Baroin’s office said.
The decision «confirms the French financial sector’s determination to fully participate in the efforts to guarantee the financial stability of the euro zone,» the statement added.
Euro zone leaders agreed last week to provide 109 billion euros in new official financing to Greece until mid-2014 on top of 45 billion euros of undisbursed bilateral loans from a first bailout. Greece must raise 28 billion euros on its own from privatisations.
To help the euro zone taxpayer shoulder the burden of getting Greek finances back to sustainability, private sector investors also agreed to choose from a menu of options including a Greek debt swap, a rollover or a buy-back to contribute a net 50 billion euros in financing in 2011-2014.
France’s biggest bank, BNP Paribas, is the largest holder of Greek debt outside of Greece with exposure of 4.5 billion euros of bonds on its banking book.