French PM: Greek deal still possible, euro membership at stake

French PM: Greek deal still possible, euro membership at stake
French Prime Minister Manuel Valls urged the Greek government to come back to the negotiating table and warned that the country's membership of the euro was at stake.
PHOTO: AFP

PARIS - A cash-for-reforms deal on Greece is still possible, French Prime Minister Manuel Valls said on Sunday, urging the Greek government to come back to the negotiating table and warning that the country's membership of the euro was at stake.

Finance ministers of the 18 other countries sharing the euro on Saturday blamed Greece for breaking off talks after it called a July 5 referendum on new bailout terms.

They shut the door on extending a credit lifeline, leaving Greece facing a default that could push it out of the euro and cause ripple effects across the European economy and beyond.

But while other euro zone policymakers have taken a more hard-line stance, Valls said talks could still resume.

"A deal is still possible, I invite the Greek government to come back to the negotiation table," Valls told Europe 1, Le Monde and iTELE in a joint interview. "I cannot resign myself to Greece leaving the euro zone ... We must find a solution."

Alexis Tsipras' leftist government had seen its hopes of building an anti-austerity alliance with France dashed when it came to power in January, with Paris insisting it would act jointly with Germany over Greece's debt crisis.

But, departing from Germany's more hawkish line in recent weeks, France has repeatedly said no one can afford failure - not only Greece, but also the rest of the euro zone.

And after talks collapsed on Saturday, Greek Finance Minister Yanis Varoufakis praised his French counterpart Michel Sapin's efforts to find a deal and Sapin said France was well placed to help dialogue between Greece and its peers, without mentioning any specific initiative.

Euro zone officials said France alone agreed to Greece's request to discuss an extension of the bailout at Saturday's Eurogroup before being slapped down. Asked about that, Sapin didn't deny having at least been open to the Greek request, saying France was ready to resume dialogue at any time.

Valls, while insisting he wanted Greece to stay in the euro zone, nevertheless said on Sunday that Greeks must be told the truth about what was at stake in the July 5 referendum.

"What is at stake is staying in or exiting the euro zone," he said. "If there is a negative vote, there is a real risk ...of exiting the euro zone."

Valls also said the European Central Bank should not cut off support to Greek banks even if the country misses a June 30 deadline for debt repayments to the International Monetary Fund.

"The European Central Bank is independent, but I don't doubt it will assume its responsibilities," he said. "I don't think it can cut off support, to put it another way."

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