Greek euro exit 'would cost France EUR 50 bn'

(PARIS) - France would face a bill of 50 billion euros ($64.3 billion) if Greece were forced to quit the eurozone, outgoing French Finance Minister Francois Baroin warned Tuesday.

Speaking to Europe 1 radio, Baroin said that in addition to the costs to the state, French banks and insurance companies with Greek assets would lose out, but he predicted that they could survive this.

"We have loaned 50 billion," he said, referring to France's part in the EU fund set up to protect weaker member states from default.

"If Greece leaves the euro, if its economic model collapses and there's no more banking system, that would cost us 50 billion euros net, plus the assets that the banks and insurers have on their books," he warned.

Baroin admitted that even if Greece stays in the euro that will cost its partners, but argued that this would at least allow a coordinated response.

Asked whether French financial institutions could survive a Greek exit from the euro, Baroin said: "Greece is not a big matter in itself, it's not a major risk and our banks would be entirely able to absorb it.

"But what is very complicated to predict is the exceptional risk of contagion the exit of a eurozone member would represent in terms of doubt and distrust in the minds of investors, Chinese, Japanese and others."

Baroin was finance minister in President Nicolas Sarkozy's outgoing right-wing government.

He and the rest of the cabinet resigned last week after Sarkozy was defeated by Socialist candidate Francois Hollande, but they are managing ongoing business until their Socialist successors take over.