France’s proposal for private-sector participation in a second bailout for Greece remains unproven for wider use, Irish Deputy Prime Minister Eamon Gilmore said.
“France has taken an initiative on private-sector participation in the Greek program and it appears that others may follow suit,” Gilmore said in speech in Dublin today, according to a text e-mailed by his office. “Whether that approach can be generalized for more than French-held Greek debt is yet to be tested.”
French President Nicolas Sarkozy said on June 27 that French banks were nearing an agreement to roll over 70 percent of their holdings of Greek debt to 2014 as part of a second bailout under consideration by European leaders. France’s proposals demonstrated “innovative” ways to deal with the Greece’s debts “without provoking unintended consequences,” Gilmore said.
Financial markets have found the European Union’s lack of a “comprehensive solution” to the sovereign debt crisis “unsettling,” Gilmore said. Ireland is “doing its bit” to resolve the problem, though the bloc needs to fix it “as a whole,” he said.
Ireland, which agreed to an 85 billion-euro ($123 billion) rescue package in November, will seek to return to international debt markets “as soon as possible,” Gilmore said. The difference in yield between Irish and German 10-year bonds widened 2 basis points today to 860 basis points from July 1.
“We have suffered a huge loss of effective sovereignty that will only be restored when Ireland can, once again, pay its way in the world,” Gilmore said.