France: Greece’s last hope? – FT

Greece’s best hope of remaining in the eurozone may now run through Paris, where president François Hollande has emerged as a tireless — and lonely — advocate for keeping Athens in the fold.

Even as other eurozone leaders have grown exasperated with Greece’s leftwing prime minister, Alexis Tsipras, and resigned to a Grexit — a Greek exit from the eurozone — Mr Hollande has continued to manoeuvre behind the scenes for a deal that would send about €7.2bn in rescue funds to Athens.

Mr Hollande is determined to keep intact a single currency that was a French-inspired initiative to deepen European integration.

Still, he faces long odds of shifting Angela Merkel, the German chancellor — and a sceptical public in France, where his own approval ratings are mired at historic lows.

“Hollande? He’s a puppet,” said Christine Nicolas, a 54-year-old sculptor who had gathered with hundreds of others in Place de la République in Paris to celebrate Greece’s rejection, in a referendum, of its European bailout programme. “He listens to what Angela Merkel says. He reacts by saying, ‘Oh, that’s not kind!’ But that’s it. At last, there’s a people now rising up against austerity in Europe.”

With Greece’s banks possibly just days from collapse, even France’s finance minister, Michel Sapin, acknowledged the difficulty of snagging a deal from the jaws of failure. “The thread of the negotiation is very thin, very thin,” Mr Sapin warned on Monday.

Mr Hollande’s diplomacy is not only designed to rescue the eurozone from a historic setback and avoid the potential financial fallout of a Grexit that could hit France harder than Germany.

Two years before the next presidential elections, the French politician is also seeking to stay in tune with a public opinion that is arguably more sympathetic than any other in Europe to Greece’s plight. The efforts are also meant to appease a leftwing majority that resents Mr Hollande for reneging on his campaign promise to confront the German chancellor on austerity.

“François Hollande is preparing for the 2017 election. He is sending messages to his camp,” said Laurent Bouvet, a political sciences professor at Versailles University. “If he follows Angela Merkel, he knows he will pay for it.”

Contrary to the prevailing sentiment in Germany, the French generally express sympathy for Mr Tsipras: in a poll published on Sunday by Le Parisien newspaper two-thirds judged his actions “courageous”.

Even though most French do not want to lend more money to Greece, nearly 60 per cent believe the Greek prime minister is right to demand debt relief from his country’s creditors. A majority believe Greece will not pay down its loans anyway.

“We are too tough on Greece,” says Pierre-Xavier Prietto, project manager at Le Cercle des Économistes, a Paris-based think-tank. “The Greek crisis is a collective mistake, it’s not just Greece which is at fault, but Germany and France too. It’s not right to humiliate an entire people.”

The French have focused relentlessly on debt relief for Greece, trying to persuade the Germans and other northern creditors that a commitment to it in the months ahead might allow Mr Tsipras to sign up to reforms and spending cuts that are deeply unpopular at home. Even though Greece is not paying down debt owed to its eurozone members before 2021, pushing back maturities would give Athens more budgetary breathing room in the next few years.

“The weight of the debt is too heavy in the next few years,” Mr Sapin told Europe 1 radio on Monday. Rejecting the idea of cancelling part of the debt, he mentioned instead a possible “reprofiling”.

But Mr Tsipras must first send new reform proposals and budgetary measures — preferably before the meeting of eurozone finance ministers scheduled for Tuesday in Brussels — and overcome the suspicion that he will backtrack. Only then, the French hope, will Ms Merkel come aboard.

So far, the results have been discouraging. Last Tuesday, for example, hours before the European bailout programme was due to expire, Mr Hollande secured a commitment from Mr Tsipras to cancel the planned referendum in exchange for Ms Merkel returning to the negotiating table, said people involved in the talks.

It was hard enough to reverse Ms Merkel’s position, but Mr Tsipras’s failure to fulfil his pledge killed the French initiative the following day.

Making Mr Hollande’s task more difficult, Greek voters on Sunday voted in the referendum to oppose the EU bailout plan — a gesture that many of their creditors regarded as a death knell for the country’s eurozone membership.

Still, Mr Hollande is persevering. Hours after the vote, he invited the German chancellor to Paris for a bilateral meeting in an attempt to rekindle negotiations.

Earlier on Sunday, he had sent a message through his economy minister, Emmanuel Macron, urging the parties to “resume discussions with Greece whatever the outcome of the referendum”.

“Even if there is a No vote, our responsibility will be to avoid a Versailles treaty of the eurozone,” Mr Macron told the Rencontres Économiques conference in Aix-en-Provence, referring to the tough conditions imposed on Germany after it lost the first world war. “If the No wins, it will be a historic mistake to crush the Greek people.”

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