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Grexit: France Wants to Keep Greece in Eurozone


French PM Manuel Valls has said his country will do all it can to keep Greece in the eurozone, because allowing it to leave would be too risky.

“The basis for a deal exists,” Manuel Valls said ahead of an emergency eurozone summit.

However, Germany has warned against any unconditional debt write-off.

Eurozone ministers have called on Greece to put forward fresh proposals after Greek voters rejected the latest draft bailout deal in a referendum.

Greek PM Alexis Tsipras met Greek political party leaders on July 6 and headed to Brussels on July 7, where he is expected to present new proposals.

His plan is said to include a demand for Greece’s vast €323 billion ($356 billion) debt to be cut by up to 30%.

Greece’s teetering banks are to stay closed on July 7 and July 8.

The European Central Bank (ECB) is maintaining its pressure on the banks, refusing to increase emergency lending and ordering them to provide more security for existing emergency loans.Grexit Greece debt crisis 2015

European finance ministers and officials gathered in Brussels told reporters they wanted to hear new proposals from Greece’s new finance minister, Euclid Tsakalotos, ahead of a full summit of eurozone leaders later.

“On Sunday the Greeks gave their voice but there are also 18 other countries with a voice,” cautioned European Economic Affairs Commissioner Pierre Moscovici.

Peter Kazimir, finance minister of Slovakia – one of the countries with the highest exposure to Greek debt – said he was “skeptical” that a deal would be found, adding that debt relief was a “red line for my country”.

In his comments on July 7, Manuel Valls said the eurozone could not “take the risk of Greece leaving” – for economic as well as political reasons.

“There is no taboo subject when it comes to [Greek] debt,” he told French radio.

Germany, which takes a tougher line, has warned against any unconditional write-off of Greece’s debt, amid fears it would destroy the single currency.

“The other 18 member states of the euro can’t just go along with an unconditional haircut [debt write-off],” said German economy minister and vice chancellor Sigmar Gabriel.

The differences between the French and German stances on Greece reflect a fissure running through the EU, say correspondents.

Several eurozone countries – including Malta, Slovakia and Estonia – are owed significantly more by Greece as a percentage of GDP than Germany or France.

Meanwhile, the ECB said it would keep emergency cash support for Greek banks, which are running out of funds and on the verge of collapse, at the same frozen level – refusing requests for additional support.

It told the banks to lodge more collateral – or assets – with the Bank of Greece, reducing the amount of spare cash the banks have.

Capital controls have been imposed, with people unable to withdraw more than €60 a day from cash points.

The European Commission – one of the “troika” of creditors along with the IMF and the ECB – wanted Athens to raise taxes and slash welfare spending to meet its debt obligations.

Greece’s Syriza-led left-wing government, which was elected in January on an anti-austerity platform, said creditors had tried to use fear to put pressure on Greeks.