French Prime Minister Francois Fillon said European governments should agree to use leverage to make the region’s financial support fund “massive.”
The European Financial Stability Facility “needs to be massive,” Fillon told an audience of entrepreneurs in Paris. “The 440 billion euros need to be used with a leverage effect, a bit like a bank.”
Fillon also said that the euro area needs to do everything it can to avoid a Greek default.
“Nothing would be worse than this solution,” Fillon said. “If you accept the bankruptcy of Greece, you accept that of Greek banks. Then you bring down European financial system and allow eurozone to explode.”
Fillon said the International Monetary Fund and the European Union need to agree on a level of write-downs on Greek debt “once and for all.” He said European leaders meeting in Brussels Oct. 23 will set out a plan to re-capitalize banks that starts with pressing them to find funds without government help.