France is ready to offer Greece concessions on its debt to help the country’s new government revive its economy, Finance Minister Michel Sapin said.
The French government is willing to discuss ways to ease Greece’s financial burden including extending the maturity of its debt, Sapin said Sunday in an interview with Canal Plus television before meeting with his Greek counterpart Yanis Varoufakis. He ruled out a full write-off and said the French government’s total exposure to Greece is 42 billion euros ($47 billion).
“They say we cancel it, we just cancel it — no,” Sapin said. “We can discuss, we can postpone, we can alleviate. But we won’t cancel it.”
The comments may offer encouragement to Greek Prime Minister Alexis Tsipras who begins a tour of European capitals tomorrow as he seeks support for a plan to ease the country’s debt burden to help him pay for a program of public spending to boost gross domestic product. Tsipras said Saturday that Greece would repay its debts to the European Central Bank and the International Monetary Fund, leaving the focus of any debt reduction on the other euro-area governments.
Varoufakis appointed Lazard Ltd. as adviser on issues related to public debt and fiscal management on Saturday.
“There is a range of possible solutions: extending the maturities, lowering interests rates, and the much more radical solution, the haircut,” Matthieu Pigasse, the head of Lazard’s Paris office who has advised Greece in the past, said in a Jan. 30 interview on BFM Business television. “If we could cut the debt by 50 percent” he said, “it would allow Greece to return to a reasonable debt to GDP ratio.”
He said Greece’s debt to public creditors was about 200 billion euros.
Sapin and Varoufakis plan to make a joint statement in Paris on Sunday evening.
“That people in Greece say ‘we need a bit of air’ I can understand that,” Sapin said. “It’s legitimate for them to say we want to discuss how we can lower the weight of this debt.”