Bloomberg News

Greece Canceling Bailout Would Breach Trust, Hollande Says

June 13, 2012

Greece would breach the relationship of trust with its European Union partners if it canceled its bailout commitments, French President Francois Hollande said.

“Honoring the commitments that have been made does not mean remaining in the same situation,” Hollande said in an interview broadcast on Athens-based Mega TV today. “If there isn’t growth then there can be no reduction of the deficit, and Greece is proof of this.”

Hollande said his election to the French presidency on May 6, the same day as inconclusive parliamentary elections in Greece, has put growth back on the EU agenda. This can benefit Greece, as long as voters decide in repeat elections on June 17 to stand by their country’s pledges and remain in the euro, he said.

“If the impression is given that the Greeks want to distance themselves from their agreed commitments and to abandon every prospect of recovery, there will be countries in the euro zone that will prefer to terminate Greece’s presence,” Hollande said. “I want Greece to remain in the euro zone, but Greeks must understand that this requires a relationship of trust.”

The May 6 vote in Greece propelled the Syriza party, which has said it wants to cancel the terms of Greece’s bailouts from the EU and International Monetary Fund, into second place. The latest polls on June 1 showed it vying with the New Democracy party for first place.

As long as Greeks show that “they want to remain in the euro zone, they should know that Europe will support them,” Hollande said.

Europe’s financial crisis is not just about Greece, and there is an urgent need to address threats arising from the Spanish banking sector that endanger Spain’s ability to refinance itself, he said.

To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net


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