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Chancellor Angela Merkel/AFP


Greek PM in crisis talks with Merkel

Chancellor Angela Merkel/AFP

BERLIN, Aug 24 – Greece’s prime minister was expected to press for more time to make key reforms and spending cuts to keep his debt-wracked country in the eurozone at crisis talks Friday with Chancellor Angela Merkel.

Antonis Samaras kicks off a two-day trip to Berlin and then Paris with Greece’s future in the 17-nation bloc again in the balance as its cash reserves dry up and a new injection of European funds hangs by a thread.

The prime minister’s trip comes a day after Merkel and French President Francois Hollande stressed they wanted to keep Greece in the euro but insisted it must redouble its reform efforts to unlock a new funding lifeline.

“It is important for me that we all stick to our commitments… but I will encourage Greece to continue along its path of reforms,” Merkel told reporters before her meeting with Hollande, which was dominated by the crisis in Greece.

For his part Hollande said he was in favour of Greece remaining in the eurozone but that this was in the hands of the Greeks themselves.

“I want Greece to stay in the eurozone,” he said, adding however: “It’s up to the Greeks to make the necessary efforts so that we can achieve this goal.”

In the run-up to the talks, Samaras has engaged on a determined media charm offensive, telling papers in both Germany and France that a “Grexit”, or Greek exit from the euro, would be catastrophic for Europe.

He told Europe’s most widely read paper, Germany’s Bild, that Greece wanted a “little breathing space” to enact key reforms and get the recession-wracked economy moving again.

To another key opinion-forming paper in Germany, the Sueddeutsche Zeitung, he pledged: “The Germans will get their money back, that I guarantee personally. And all the others will get their money back too.”

As part of a 130-billion-euro ($161-billion) bailout package from the EU and the International Monetary Fund (IMF), Greece has committed to sweeping reforms and some 11.5 billion euros of cuts in 2013 and 2014.

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But amid reports that the budgetary hole is actually closer to 14 billion euros and a recession now in its fifth year, Samaras is thought to want a two-year extension to make the cuts.

Merkel has stressed the importance of an assessment due next month by experts from the EU, European Central Bank and IMF on Greece’s progress in making the reforms required.

A positive report from the so-called Troika will determine whether Greece gets the next 31.5-billion-euro tranche of funds to keep it afloat and in the eurozone.

The head of the Eurogroup of eurozone finance ministers, Jean-Claude Juncker, also insisted during a visit to Athens on Wednesday that the Troika report was the next critical step.

While insisting he was “totally opposed” to Greece leaving the euro, he warned Athens that this was the “last chance” to stick to its promises.

European Parliament President Martin Schulz, who is German, said he was “convinced” the Troika would confirm that Greece is making progress in its reforms.

“Only if the Troika confirms there are genuine efforts at reform can we talk about an extension to the measures imposed on Greece,” Schulz told the Passauer Neue Presse regional daily.

Samaras insisted in his interview with Bild that “more time does not automatically mean more money.”

However, German Finance Minister Wolfgang Schaeuble appeared to slap down this idea, telling German radio: “More time would, in case of doubt, mean more money.”

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The eurozone had already gone to its very limits in hammering out the deal with Athens last year, said the minister, adding: “More time is not a solution to the problems.”

And according to a report in the Financial Times Deutschland, a secret cell has been set up within Schaeuble’s ministry to examine the possible consequences of a Greek exit from the eurozone.

The paper said the group was working on “calculating the financial consequences” and considering “how to prevent a domino effect onto other eurozone countries.”

After meeting Merkel, Samaras is due in Paris on Saturday for a meeting with Hollande.


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