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Europe
Merkel offers no respite to Greek PM on debts
Merkel stands her ground during talks in Berlin, insisting Athens stick to its pledges on enforcing fiscal reforms.
Last Modified: 24 Aug 2012 19:45

Angela Merkel, the German chancellor, has reassured Greek Prime Minister Antonis Samaras that she wants his country to stay in the eurozone, but gave no sign of ceding to his pleas for more time to meet the tough terms of Athens' international bailout.

Samaras, who was visiting Berlin ahead of a trip to Paris, has made clear he is looking for more time to implement the current reforms rather than going cap in hand for more cash.

In a joint news conference with Merkel on Friday, Samaras promised to get results and to narrow Greece's "fiscal deficit and the deficit in confidence".

"We're not asking for more money. We're asking for breaths of air in this dive we are taking," he said. 

But the most he got from Merkel was a promise "that we will not make premature judgments but will await reliable evidence", by which she meant the "troika" report by Greece's international creditors due this autumn.

Hollande talks

Samaras is likely to get much the same response from French President Francois Hollande in Paris on Saturday.

Hollande and Merkel co-ordinated their stance on Greece over dinner in Berlin on Thursday evening.

Trying to emulate the "Merkozy" partnership under Hollande's predecessor Nicolas Sarkozy, the conservative chancellor and the socialist president showed a united front, insisting Greece must meet its targets before any new discussion of terms.

Merkel stuck doggedly on Friday to her policy of deferring to the troika report from the European Commission, European Central Bank (ECB) and International Monetary Fund, though she did say that she and Hollande were in no doubt they wanted Greece to stay in the single currency.

"Greece is part of the eurozone and I want Greece to remain part of the eurozone," Merkel said.

European shares and the euro weakened on Merkel's cautious response to Samaras and fading hopes of ECB action to prop up the bonds of struggling eurozone countries.

'Sign here, Herr Samaras!'

In a chilly welcome for Samaras in Berlin, Merkel's parliamentary leader Volker Kauder said "neither the time nor the content can be renegotiated" and added for good measure that a Greek exit "would be no problem for the euro".

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One German paper said the finance ministry was studying the impact of a Greek exit while the populist daily Bild wanted the Greek leader to make a personal promise not to short change German taxpayers.

"Sign here, Herr Samaras!" said the paper, which like much of the German media has been taking a tough line on Greece.

The Greek prime minister complained about such media coverage, telling the news conference that this "cacophony" about his country leaving the euro made it impossible to launch the privatisations needed to restore fiscal balance in Greece.

"Would any business invest in euros in something if he thinks he will get back drachmas? Of course not," said Samaras.

Merkel said she reads the Greek press every day to see how the austerity measures she champions are received, but added that she could not do anything about German media coverage.

Tough line

The two leaders' meeting follows a brief period of market optimism that Europe - and particularly the ECB - will finally come up with decisive action in a busy month of euro diplomacy in September to resolve the sovereign debt crisis.

With sources now saying Spain may be on the brink of a sovereign bailout as well, Europe and the IMF are keen to stress the importance of strict conditions for aid.

Some of Merkel's conservatives have signalled this week that they might envisage alleviating the interest rates or maturities on Greece's emergency loans if the troika mission finds that Athens is respecting the main lines of the deal.

But German Finance Minister Wolfgang Schaeuble has taken a tough line on Greece this week and his spokesman pointedly said a small clause in the Greek bailout deal apparently allowing more time for reform targets in the case of a worse-than-expected recession was "not legally binding".

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Source:
Al Jazeera and agencies
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