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Merkel and Hollande hold talks over Greece
German and French leaders to present united front to Greece PM Antonis Samaras about his country's bailout terms.
Last Modified: 23 Aug 2012 17:33
Merkel and Hollande will try to project confidence they can replicate the "Merkozy" alliance [AFP]

German and French leaders Angela Merkel and Francois Hollande are meeting to fine-tune their message to Antonis Samaras, Greece's prime minister, as they prepare to present a united front about his country's bailout terms.

Merkel and Hollande will begin a charm offensive trip to Berlin and Paris on Friday in the hopes of persuading Europe's big powers that Greece deserves patience.

The debt-laden country has promised to embark on austerity measures set as a pre-condition by the European Union, the IMF and the European Central Bank (ECB) to grant Greece more bailout cash.

Greece says it needs more time for the reforms, which include freezing public sector hiring, pension cuts and shedding thousands of jobs, among others.

Samaras has been giving interviews to German media stressing that while Athens may seek more time to meet austerity targets, it is not asking for more money from partners.

But Wolfgang Schaeuble, Germany's finance minister, sounded a stern note, saying "more time is not a solution to the problems".

Greece wants four years instead of two to push through painful economic reforms and alleviate the impact on its people.

'More money' 

Schaeuble, whose country is the biggest funder of the ECB, warned that more time could also mean "more money", adding that Europe's help for Greece had already "gone to the limits of what is economically viable".

European leaders say any decisions on Greece will depend on a report next month on its progress by a "troika" of the EU, ECB and IMF inspectors.

Merkel will meet Samaras on Friday while Hollande will receive him on Saturday.

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The meetings will be a moment of rare optimism on financial markets that the EU - especially the ECB - is poised for decisive action on the eurozone debt crisis, analysts said.

Merkel appeared to rule out far-reaching concessions on Wednesday, saying during a trip to Moldova that she was "going into these talks with the awareness that we have to achieve that every partner sticks to his commitments".

But behind the stern public message, Germany and France may have little choice but to give Samaras what he called "a bit of air to breathe".

There is little appetite in Berlin and Paris for forcing Greece out of the 17-nation eurozone, a move many fear could trigger a domino effect.

Merkel and Hollande will try to project confidence they can go some way towards replicating the "Merkozy" alliance that gave the eurozone some semblance of unified leadership under Hollande's predecessor Nicolas Sarkozy.

The Franco-German axis has been strained by Hollande's calls for more measures to stimulate growth, a rebuff to Merkel's strict agenda of austerity.

"It's not just about balancing budgets, although we must hold to that, it's also about growth," French Prime Minister Jean-Marc Ayrault said of Hollande's visit.

Some German officials say Merkel's relationship with Hollande is off to a rocky start, which might explain why they will give only a brief statement at 7pm local time (17:00 GMT) before they meet, rather than a full news conference after their talks.

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Source:
Agencies
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