FRANCE HAS said Greece should be given more time to meet the terms of its international bailout, the clearest call to date by a leading euro zone country for an easing of the stringent conditions attached to the €174 billion rescue package.
Jean-Marc Ayrault, the prime minister, taking a clear swipe at Germany, warned that a Greek exit from the euro zone would be “unmanageable” and could be “the beginning of the end of the European project”.
Speaking in an interview with French news website Mediapart, Mr Ayrault said: “We can already offer [Greece] more time . . . on the condition that Greece is sincere in its commitment to reform, especially tax reform.”
It was the most explicit call by Paris for relief for Athens, which has informally suggested it be given an extra two years to meet its reform commitments.
Last week, Christine Lagarde, head of the International Monetary Fund, said such a move should be “considered as an option”, but it has faced stiff opposition from Germany and other northern euro zone countries such as Finland.
French president François Hollande has been careful not to cross Angela Merkel on the issue, but Mr Ayrault made clear the frustrations in the new socialist government over the handling of Greece by euro zone leaders, including the German chancellor, criticising euro zone leaders for a “political weakness” and “a lack of vision”.
“When you think that the Greek crisis has lasted 2½ years, and that Greece represents only 2 per cent of the gross domestic product of the euro zone . . . European leaders have not been able to meet their responsibilities in time,” he said. He added: “I think, however, that the principal German leaders have understood that losing a sense of reality about Greece would launch us into a completely unmanageable situation.”
France’s chief fear is that a compounding of the euro zone crisis would turn the spotlight of the financial markets on itself and the country’s public debt, which is set to exceed 90 per cent of GDP.– Copyright The Financial Times Limited 2012
