PARIS (Reuters) - The French government and banks have agreed on a proposal to make a Greek debt rollover more palatable to creditors, a banking source said on Sunday, confirming a report in Le Figaro newspaper.
Under the plan, creditors would reinvest 70 percent of the proceeds reimbursed when Greek debt falls due, with 50 percent going into new Greek bonds with a maturity of 30 years instead of five, the newspaper said on its Web site.
Those bonds would pay a basic rate of interest similar to what Greece is paying on loans from the European Union and IMF, with the prospect of investors earning an additional bonus if the Greek economy grows strongly.
The other 20 percent would be reinvested in a zero coupon fund of “high quality securities,” which would accumulate interest to be paid at maturity, Le Figaro said.
“It’s a solution from the French Banking Federation,” the source said, confirming that the report in Le Figaro was “close to reality.”
The French finance ministry was not available for comment. The French Banking Federation declined to comment.
German banks, which say they have up to 20 billion euros ($28.3 billion) of exposure to Greece, have called for the state to guarantee their risk with taxpayer money should they participate in some form of a debt rollover.
The Greek government will try to push through a deeply unpopular set of austerity measures this week to enable it to receive the next 12 billion-euro tranche of bailout loans it needs to avoid defaulting on debt that matures in mid-July.
Greece accepted a package of 110 billion euros of EU/IMF loans in May 2010 but now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.
Euro zone finance ministers have said they will define by early July “the main parameters” of a new international bailout plan.
German Finance Minister Wolfgang Schaeuble told Bild am Sonntag he expected private sector creditors to participate willingly in a second bailout package, underlining also that Greece would not receive the next aid tranche if the government’s austerity plans were vetoed.
The Greek parliament is due to vote on Wednesday and Thursday on measures that include 6.5 billion euros of extra austerity steps for this year and savings of 22 billion euros for 2012-2015 to cut deficits and keep qualifying for EU/IMF aid.
Greece’s deputy prime minister said on Sunday that rebel lawmakers may block some reforms sought by international lenders, though parliament would probably back an overall austerity package.
Reporting by James Regan; Editing by Daniel Flynn and Peter Graff