French Finance Minister François Baroin Wednesday said the extent of private-sector involvement in bailing out Greece may need to be reexamined after the volatility on financial markets over the summer.
The comments mark a public acknowledgment from France—which up until now has argued that an agreement by euro-zone heads of state on July 21 should be applied in full—that further participation from private-sector creditors may be required as Greece's financial crisis deepens.
Euro-zone leaders agreed on a 21% voluntary write-down for Greece's bondholders on July 21, as well as a second aid program for the country and changes to the currency bloc's bailout mechanism. Since then, stock markets have been plunged into turmoil as investors fretted over global growth prospects and the banking sector's ability to deal with the euro-zone debt crisis. French banks, which have large exposure to troubled euro-zone countries, have been in the eye of that storm.
"Given what's happened over the last three months, we should perhaps look at the extent of the private-sector involvement," Mr. Baroin said on French radio station RTL.
Still, Mr. Baroin said it's premature to say whether the contribution should be increased. "It's part of the questions that finance ministers have asked experts so that they ask the Greek government," he said.
Finance ministers from the euro zone clashed during a two-day meeting at the start of the week over the question of expanding the private sector's contribution.
On Monday evening, Jean-Claude Juncker, chairman of the Eurogroup of euro-zone finance ministers, acknowledged the need for "technical revisions" to the bailout plan but wouldn't elaborate. The following day, Spanish Finance Minister Elena Salgado insisted there could be no changes to the bailout package agreed in July.
German officials say Berlin is reluctant to unpick the July deal before international inspectors in Athens have established the size of Greece's financial shortfall; their report is expected later this month at the earliest. But, these officials say, if Greece needs more money, Germany is in the camp of those who want banks and other bondholders to make bigger sacrifices than they agreed to in July, in a deal that is now seen in Berlin as having been too favorable for the banks.
Mr. Baroin also said on French radio Wednesday that should any banks need to be recapitalized due to the euro zone's debt crisis, it would take place at a European level and not at a national level.
"The response, if needed, will be European and collective, not French," he said.
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