France will not need EU fund for bank bail-out: minister

12th October 2011, Comments 0 comments

France will not need to tap the eurozone's revamped bail-out fund in order to recapitalise its banks, government spokeswoman Budget Minister Valerie Pecresse said Wednesday.

There had been reports that France was seeking to convince its EU partners to use the European Financial Stability Facility to shore up private lenders exposed to risky sovereign debt, a move opposed by Germany.

"The EFSF could lend to certain states that might need these loans to recapitalise their banking systems. France will not call on the EFSF," said Pecresse, briefing reporters after a cabinet meeting.

The International Monetary Fund has estimated that European banks may need more than 100 billion euros in fresh capital to protect themselves against a risk of sovereign default in weak economies such as that of Greece.

French banks are particularly exposed to Greek and Italian debt and President Nicolas Sarkozy's government, while vowing to protect France's flagship lenders, is keen to protect its own top, "AAA" credit rating.

© 2011 AFP

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