Greek talks can resume any time, Grexit a risk, says French finance minister

Talks on a cash-for-reforms deal with Greece can resume at any time, France’s Finance Minister Michel Sapin said on Monday, warning that Greece’s euro membership was at stake.

Athens decided on Sunday to close its banks and impose capital controls to check the growing strains on its crippled financial system after it announced a referendum on aid talks, which its lenders said meant negotiations were over.

Sapin told France Inter radio the question for Greece was the following: “Do you want to continue the negotiations or do you want to take the risk of exiting the euro?”

Of a euro exit for Greece, he said: “It’s always a possibility, it’s a risk.”

Just before heading to an emergency government cabinet called by French President Francois Hollande to discuss the Greek crisis, Sapin said that as an early backer of the Greek government he took badly its decision to interrupt talks.

“I have personally been hurt by the fact that Greek government interrupted the talks when, thanks to France in particular, the issue of the debt was to be discussed,” Sapin said of easing Greece’s huge debt burden.

He added that France was nonetheless willing to facilitate dialogue between Greece and its partners. “We can resume this discussion at any moment, to support Greece,” he said.

The failure to reach a deal with creditors leaves Greece set to default on 1.6 billion euros of loans from the International Monetary Fund that fall due on Tuesday, an event which raises the threat of an eventual exit from the euro.

Sapin reaffirmed that Greece belongs in the euro and said it would suffer most if it had to leave it.

While there would be some impact on borrowing rates for non-core eurozone countries, the single currency bloc is well prepared to face the Greek crisis, he said, adding: “France has nothing to fear at all, now, from these difficulties.”

Separately, an aide to President Francois Hollande said an emergency French cabinet meeting set for 0900 am local (0700 GMT) “aims at taking stock of the situation in the euro zone, in Greece and in France and see how we can use the next few days to talk and try to solve the crisis”.

French banks, which have sharply reduced their exposure to Greece over the past years, opened sharply lower on Monday, with the biggest lender BNP Paribas (BNPP.PA) falling by 5.4 percent, Societe Generale (SOGN.PA) shedding 5.5 percent and Credit Agricole (CAGR.PA) shares plunging by 6.7 percent by 0705 GMT.

The CAC 40 (.FCHI) index of French blue chips was down more than 4 percent.

[Reuters]