Reuters are quoting reports in the French press which suggests that the French banks and the French government have agreed on a process for extending credit lines to Greece. French banks have by far the largest exposure to Greek debt, followed by German banks.
The Greek parliament will debate and vote this week on deeply divisive austerity measures. The parliamentary meetings begin on Wednesday, with the vote expected on Thursday. If passed, Greece will then be able to receive the next tranche of EU aid meaning that it doesn’t default on debt maturing later in July. The French plan is that, presuming they get paid when the debt is due, they will reinvest 70% of the money back into Greek bonds, some of this with a much longer maturity.
