Unable to agree on modalities for private sector participation in new aid plan for Greece, the euro area has opened the way Monday to a defect Greek, accelerating a wave of widespread distrust in the European markets.
Paris and European stock markets tumbled Tuesday morning in the wake of the euro, while the yield spread between sovereign debt of Italy, now in turmoil, and those of Germany, references to the euro area, reached a new record of 339 basis points.
After eight hours of intense discussions described by several diplomats, ministers broke up Monday night without clarifying what options the participation of banks, insurance companies and investment funds with a Greek background were considered, is limited to charging a technical group to study in the coming days.
Above all, they reneged on their promise to avoid at all costs a "credit event" and a "selective default" in Greece, a prospect that had yet been specifically rejected in a previous meeting of the Eurogroup and the heads of State and Government of the Twenty-September
Only the opposition of the European Central Bank this possibility was included in the final declaration.
According to several sources, three options of private sector participation in the new Greek plan remain on the table.
But after talks on Monday, two were particularly popular: those of a repurchase of its own obligations by the Greek state and mainly that of a "swap" of Greek bonds existing cons of new securities to maturity elongated, pushed by Germany.
CLARIFICATION "In the coming days"
This solution, which would reduce the burden consistently Greek debt had already been proposed by Berlin and discussed in early June before finally being discarded because it involved a "selective default" of Greece, which opposed the ECB and France.
The entire euro zone came around to this position after an agreement between Nicolas Sarkozy and Angela Merkel, but that consensus was shattered Monday, one week to the day after the rating agency Standard & Poor's does the third option, proposed by France of a "roll-over" of the Greek debt maturing by 2014, would also such a "selective default".
Faced with sharp divisions that have materialized on Monday night and the blank page that is offered to them again, ministers commissioned a technical group to clarify the options available in the coming days.
The President of the Eurogroup, Jean-Claude Juncker, said that the ambition of the Ministers of Finance was able to stop the contours of the Greek new plan "as soon as possible" and a further meeting of the Eurogroup could be organized to next ten days, said several sources.
Unexpectedly, however they have decided to review again the conditions and scope of assistance from rescue fund "euro area" (EFSF), especially through a lengthening of maturities and lower interest rates on loans disbursed to countries in need.
Tuesday morning, the French Prime Minister Francois Fillon has provided on Europe 1 radio that the EU, if needed, could increase the effective capacity of the fund, which has been increased to 440 billion euros, which supplemented by loans from the International Monetary Fund.
He also felt that we should not panic in the markets.