France’s Baroin ‘Confident’ EU Leaders Can Reassure Markets
French Finance Minister Francois Baroin said he’s “confident” European Union leaders can agree on an aid package for Greece this week that won’t trigger a default and will address investors’ concerns on the debt crisis.
“We are working hard for a solution that would allow avoiding a selective default or a credit event,” Baroin told reporters in Washington before meeting with officials including Treasury Secretary Timothy F. Geithner. “Investors need to be reassured” and will be, he said regarding the July 21 summit.
EU leaders plan to meet this week for the second time in a month to agree on a new aid package for Greece and revamp their strategy to fight the debt crisis as it spread to the heart of Europe. Investors are already selling Spanish and Italian bonds amid divisions between officials on how to involve the private sector in a Greek bailout, which could link to a default.
Politicians are exploring ideas from bond buybacks to a temporary default. European Central Bank President Jean-Claude Trichet reiterated opposition to any Greek debt restructuring in comments released yesterday.
Baroin backed the ECB, saying France would not support a solution leading to a selective default. He said that talks with his European counterparts are “going well.”
Europeans officials are also doing some technical work to see how the European rescue fund could purchase bonds in the secondary markets, he said.
Baroin’s visit to Washington, which will last less then than 12 hours, also includes a meeting with Federal Reserve Chairman Ben S. Bernanke and a working dinner with Christine Lagarde, his predecessor as finance minister and now the managing director of the International Monetary Fund.
Asked whether Europeans have assurances from the IMF that the lender will contribute to the next Greek program, Baroin said EU officials first need to offer a response to the crisis. The Europeans will then hold discussions with the IMF on the basis of an agreement that has the fund shoulder a third of costs of bailouts in the region, he said.
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