Greece puts faith in France to solve bailout impasse

French Minister of the Economy and Finance Bruno Le Maire (right) walks with his Greek Finance Minister Euclid Tsakalotos during their meeting in Athens yesterday

France’s finance minister says Greece is on course to reach a crucial funding deal with bailout lenders this week.

“A new crisis on the Greek issue must be calmly avoided,” Bruno Le Maire said after meeting yesterday with Greek Prime Minister Alexis Tsipras.

The French minister traveled to Athens ahead of a meeting in Luxembourg on Thursday of finance ministers from countries using the euro currency.

Loan payouts from the eurozone countries have been delayed for months, and Greece urgently needs them as it faces a July spike in debt repayments worth some 7 billion euros (USD7.8 billion).

“We are not far at all from a solution. That solution must be found on June 15,” Le Maire said.

Successive Greek governments have viewed France as an ally in bailout disputes, in contrast to the more fiscally hawkish Germans.

Athens is also seeking Paris’ help on obtaining a concrete pledge from creditors on debt relief, an issue complicated by disagreement among lenders over the country’s growth potential and debt sustainability.

“We’re closer than ever to reaching an agreement on the debt issue, one than corresponds to the sacrifices made by the Greek people,” Tsipras said after the meeting.

Investors continued yesterday to anticipate an end to the months-long delay in reaching an agreement with bailout lenders.

Shares on the Athens Stock Exchange were roughly unchanged at 781 points following a weeks-long surge from just over 600 in early February, while market borrowing rates were also lower. Yields on two-year bonds dropped to 5 percent from above 10 four months ago.

Klaus Regling, head of the eurozone’s bailout European Stability Mechanism also appeared optimistic.

“I continue to be convinced that if Greece continues with its reforms, it can end the [bailout] program next year and will regain market access before the end of the program,” he said in an interview published yesterday.

Prime Minister Tsipras pushed more painful austerity measure through parliament in successive votes that ended Friday, extending draconian budget cuts for roughly five years.

While in Athens, Le Maire will met Greek Finance Minister Euclid Tsakalotos and was due to hold talks with Bank of Greece Governor Yannis Stournaras. Derek Gatopoulos, Athens, AP