European nations should do everything possible to help Greece avoid a default despite concerns about whether Athens is a reliable borrower, France's prime minister said yesterday, fuelling hopes that a bailout could be agreed this week.
Tensions between Athens and other European capitals hit new highs last week as Eurozone ministers delayed to Monday a decision on a bailout agreement and demanded more commitments from Greece.
Seven people were detained yesterday following an anti-austerity protest in which eggs were thrown at the German embassy in central Athens.
French Prime Minister Francois Fillon took Greece's side, warning that the fallout of
letting the country go up in financial flames would be far-reaching. "We must do absolutely everything so that there is not a default by Greece, which would be drastic for Greeks themselves and dramatic for Europeans," he said on RTL radio yesterday.
Now that the Greek Parliament has approved austerity measures imposed by international creditors and banks have agreed to help in the bailout, Fillon said, "the Europeans must now honour their commitments". "That is the position that France is defending." Some European politicians have downplayed the effects of such a debt default by Greece, but Fillon called that "totally irresponsible".
Eurozone finance ministers are due to meet in Brussels on Monday to decide on the bailout. Hopes that they will clear the €130 billion (Dh627.94 billion) bailout deal as well as a related bondholders' writedown pushed markets higher yesterday. The euro rose 0.4 per cent and stock markets rose across the board. Greek Prime Minister Lucas Papademos spoke yesterday with the leaders of Italy, Germany and the Netherlands to discuss the latest developments.
Papademos' office said he held a conference call with German Chancellor Angela Merkel and Italian Premier Mario Monti before a separate conversation on the telephone with Dutch Prime Minister Mark Rutte.
Rutte later tweeted that he told Papademos "that the Greeks must meet all the demands for a new [bailout] programme".
The Netherlands, one of the richest countries in the Eurozone, together with Germany and Finland, has been tough on Greek politicians in recent weeks, questioning their determination to stick to the terms of the new rescue.