Nicolas Sarkozy
Media playback is unsupported on your device
Video

French banks reach agreement on Greek debt

The President of France Nicolas Sarkozy says his government now has an agreement with French banks on rolling over Greek debt.

It is an important development because it has emerged that any second bailout allowing Athens to keep afloat, will partly depend on lenders voluntarily extending the maturities of their loans to the country, without triggering a formal default.

It is a tricky financial manoeuvre that requires delicate negotiation with Europe's rating agencies.

Nigel Cassidy reports.