France and Germany 'convinced' Greece belongs in euro

Now Reading:

France and Germany 'convinced' Greece belongs in euro

Text size Aa Aa

The French and German leaders Nicolas Sarkozy and Angela Merkel have reassured the Greek prime minister they are “convinced” that his country’s future lies inside the euro zone.

In a three-way phone call with George Papandreou, they urged his government to implement the tough measures it signed up to as part of the last bailout plan agreed in July.

Athens says it is determined to meet all its deficit reduction plans.

Fears over the consequences of an imminent Greek default have hit French banks, because of their exposure to Greek debt.

Two have been downgraded by Moody’s credit ratings agency and BNP Paribas is under review.

A Greek default could lead them to incur heavy losses, although the banks argue they have enough capital.

In Athens civil servants and shipbuilders were the latest to protest against budget cuts and unpaid or reduced wages.

An EU task force sent to aid the Greek economy has said its priority will be to help private sector companies hit by the recession.