Triumph for France

Triumph for France
A man walking past an anti-austerity banner reading 'No' in front of the Greek parliament in Athens.

President Hollande worked hard to put the brakes on a 'Grexit'



By AFP

Published: Sun 12 Jul 2015, 12:00 AM

Last updated: Sun 12 Jul 2015, 9:31 AM

Paris - As Greece inches closer to a bailout deal that will keep it in the eurozone, experts have hailed France for playing the role of pacifier in fractious debt talks and putting the brakes on a dreaded "Grexit".
After a dramatic referendum in which Greek voters rejected the terms of a bailout deal, France called for "solidarity" and urgent talks with Athens even as Germany appeared unmoved by the prospect of Greece crashing out of the eurozone.
It may have appeared impossible last week as post-referendum doomsday scenarios spread, but experts say the fact that Athens made proposals that appear palatable to its eurozone partners just days later was largely thanks to France's role as mediator.
French President Francois Hollande and his Prime Minister Manuel Valls "pushed on the breaks" to warn against Greece leaving the single currency union, said Hans Stark, an analyst with the French Institute of International Relations.
While Berlin said the referendum shut the door on further talks with Athens, Valls warned of the major geopolitical implications of a "Grexit" from the euro, saying "you don't play with history".
"Hollande's role is not trifling in the creation of a much more positive atmosphere since the day after the referendum, when some were saying: 'There you go, the 'Grexit' is nearly here'," said Stark.
"It is undeniably a success for him (Hollande)," he added.
While France publicly pushed maintaining communication with Athens, French officials said diplomats and senior figures in the treasury had also been working behind the scenes to mediate between Greece and its international creditors.
While retaining his demand for a restructuring of Athens's debt, Greek Prime Minister Alexas Tsipras on Thursday night conceded ground on major sticking points, including tax and pensions, in a bid to secure a new bailout.
Hollande was the first to publicly welcome the proposal, saying on Friday: "The Greeks have shown a determination to want to stay in the eurozone because the programme they are presenting is serious and credible."
He cautioned, though, that "nothing is decided yet" and any new Greek rescue needs to be approved unanimously by eurozone members.
A deal would be a welcome boon to the deeply unpopular Hollande, who has faced criticism at home from both the right for breaking away from Germany's line, and the extreme left who accuse him of waging a "financial coup d'etat" against Greece.
But Berlin, seen as Europe's paymaster and a key advocate of austerity, merely said it was too soon to comment and there was "very little leeway" for debt restructuring.
"If the deal happens, it will confirm the relevance of the French position. France's position that 'there must absolutely be a deal' has been decisive," said Xavier Ragot, president of the French economic think-tank OFCE.
"Last week, in recent days, France has played a real role," Greek Minister for Administrative Reforms Georges Katrougalos said.
Also encouraging a return to negotiations was US President Barack Obama, who spoke with Hollande by telephone on Monday, with both saying a deal would "require difficult compromises from all sides".
Germany has ruled out forgiving more of Greece's debt, but even Finance Minister Wolfgang Schaeuble acknowledged that International Monetary Fund chief Christine Lagarde was correct in saying Greece needed debt restructuring. This could involve pushing back repayments or lowering interest on loans.
"There is a change of tone on the German side that recognises the inevitable," said Ragot, adding that while Germany was conscious of the need for debt restructuring, "it wanted a firm commitment from Greece (on reforms)". - AFP


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