France's president said Monday that Greece's referendum on the EU's bailout proposals was a "sovereign choice" on whether or not to leave the euro zone, as he sought to allay contagion fears.

"It is democracy, it is the right of the Greek people to decide what they want for their future. What is at stake is whether or not Greeks want to stay in the euro zone (or) take the risk of leaving," Francois Hollande told reporters after an emergency cabinet meeting.

He reiterated that Paris was prepared to work with the Greek authorities to find a deal that would stave off financial disaster and noted that the two sides were not far from a deal when Athens broke off talks.

France remains "always available" for talks on a possible deal, stressed the president.

"Today, a deal is still possible. Tomorrow, that will depend on the answer the Greeks give to the referendum," said Hollande.

He sought to ease fears that the Greek chaos could spread as far as France, as stock markets around Europe plunge and borrowing costs of vulnerable countries rise.

"Today, the French economy is robust, much more robust than it was four years ago and it has nothing to fear from what could happen," assured Hollande.

Acknowledging "concerns" on the financial markets, he recalled that "very significant steps have been taken in recent months to shore up the eurozone," pointing in particular to the banking union.

Hollande was speaking as markets reacted very negatively to news that talks between Greece and its creditors broke down in acrimony over the weekend.

Greece took emergency steps on Monday, shutting its banks and stock exchange as ATMs across the country run dry with panicked citizens seeking to withdraw cash.

The Greek government has issued a decree to close banks until July 6 -- the day after a referendum on creditors' bailout proposals -- with a 60-euro ($65) limit on cashpoint withdrawals.
Source: AFP