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Greece - France

Banks in talks on Greece, Sarkozy sees long-term deal

Reuters

Banks worked urgently on Monday with the European Union on a new rescue plan for Greece, which French President Nicolas Sarkozy says would run over 30 years and avert a default.

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Sarkozy told a press conference in Paris that "prolonging loans over 30 years, and putting them on the level of European loans indexed on Greek growth, would be a system that all countries might find useful".

Private banks, owed billions of euros by Greece, were examining a plan devised by France to restructure debt without causing a default which could create dangers for the eurozone and global markets.

Vittorio Grilli, who is chairman of the eurozone's economic and financial committee, held the talks in Rome with Charles Dallara, managing director of the International Institute of Finance, a forum for leading global banks.

Germany, which is behind the pressure for private banks to bear part of the cost of a second rescue for Greece, welcomed the meeting.

There are reports that under the embryonic scheme being negotiated in Rome, banks would roll over half of the money they should receive from maturing Greek debt into new 30 year bonds.

A further 20 per cent of money due would be reinvested in high-quality bonds, with interest being paid only at the end of the life of the loan.

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