• Home
• /
• Business

France to offer 300 bln euros to unfreeze bank loans

PARIS - France is to unveil a 300-billion-euro guarantee on interbank lending on Monday as European leaders forge ahead with a joint drive to shore up the financial sector, Le Monde newspaper reported.

President Nicolas Sarkozy is to unveil details of the French bail-out at 3:00 pm (1300 GMT) following an emergency cabinet meeting, with similar announcements expected across the 15-country eurozone single currency bloc.

Meeting in Paris on Sunday, European leaders agreed to plough fresh capital into struggling banks and underwrite bank loans, which had all but dried up in a market spooked by the US subprime mortage crisis.

No global price tag was announced for the plan -- modelled on a similar scheme adopted by London last week -- but the German package alone was set to reach 470 billion euros (640 billion dollars), government sources said.

According to Le Monde, the French state will provide a guarantee of "up to 300 billion euros" (405 billion dollars) on interbank loans, that would run until the end of 2009.

There has been no indication of how much capital France could invest in its banking sector -- which has so far pulled through the credit crisis relatively unscathed.

According to a French parliamentary official, the proposed bail-out is expected to be put before parliament on Tuesday and Wednesday, in hope of being adopted before the end of the week.