An important signal comes from Paris for the resolution of the Greek financial crisis. The French president, Nicolas Sarkozy, confirmed today that he has reached an agreement with his country's banks on the management of Greek public debt securities. According to the presidency, private individuals will voluntarily proceed with a reprofiling of maturities, effectively transforming maturing securities into thirty-year bonds with lower interest than the current ones.
The rollover project comes two days after the Greek Parliament's confidence vote on the new austerity measures promoted by the Greek executive in agreement with the EU and the IMF. Greece's public debt is expected to rise to 160% of GDP in 2011. French banks are the ones most exposed to the Mediterranean country. Crédit Agricole and Societé Generale operate in Greece through the subsidiaries Emporiki and Geniki, while BNP Paribas holds a direct stake in Greek bonds. According to an analysis by Fitch last month, these three banks have a combined exposure of around 40 billion to the public and private sector of Athens.
