French PM says Greece must stay in euro

AHEAD of a meeting of European leaders on Tuesday (July 7), the first following the result of the Greek referendum, French Prime Minster Manuel Valls has said a deal to keep Greece in the euro is vital.

“France is doing everything, and will do everything, for Greece to stay in the Eurozone, because its place is in the Eurozone,” Valls told radio station RTL.

“The basics of an agreement, I am convinced, exist, and this agreement is necessary for Greece, because an exit from the Eurozone would plunge its people into an intolerable situation, and it is necessary for the coherence of the Eurozone, and so for Europe.”

While French and German leaders made a joint statement calling for Greece to come forward with ‘serious proposals,’ that may be as far as agreement between the two European superpowers stretches. German Chancellor Angela Merkel has been urged by colleagues and national newspapers not to provide further financing for Greece, or to write off any of the country’s existing debt.

Greek Prime Minister Alexis Tsipras heads for Brussels on Tuesday with a new set of proposals, knowing the country is firmly opposed to more austerity measures, whatever the consequences.

It is reported he will ask for an injection of funding to allow Greek banks to reopen – they are expected to remain closed on Tuesday and Wednesday – and a restructuring of Greek debt, which could involve writing off some debt while rearranging repayments.

A report from the International Monetary Fund (IMF), one of Greece’s ‘troika’ of creditors, released on Thursday (July 2) said that the country’s debt was “unsustainable” and would require a radical shift in policy in the country towards more privatisation and austerity, obviously not supported by the Greek people, an extension of the time given to make repayments, or a “haircut” – meaning a write off on some of the money owed.