Antonis Samaras, Greece’s prime minister, has embarked on a diplomatic push to earn his nation more time to complete reforms and retain access to bailout loans, but a top European official said that any decision will depend on a report by international debt inspectors next month.
Jean-Claude Juncker, who chairs meetings of eurozone finance ministers and is also Luxembourg’s prime minister, insisted on Wednesday that Greece must remain within the euro. Its exit from the currency used by 17 European Union countries would hurt both the country and the wider continent.
“I’m totally opposed to the exit of Greece from the eurozone,” he said after a meeting in Athens with Samaras and Finance Minister Yannis Stournaras.
The meeting is the first of several Samaras will hold this week with European leaders to press the case for granting Athens more time to complete its reforms.
Greece is dependent on two international rescue loan packages from other eurozone countries and the International Monetary Fund (IMF), which are preventing it from bankruptcy and potentially having to leave the euro.
In return, it has had to impose strict austerity measures, including cuts to salaries and pensions and repeated tax hikes.
But Athens has faltered in the speed and effectiveness with which it has implemented the reforms, fuelling impatience by its creditors, notably Germany, which is the single largest contributor to the bailout.
Merkel stands tough
Samaras will be in Berlin on Friday to speak with German Chancellor Angela Merkel and in Paris on Saturday with French President Francois Hollande.
The inspectors from the European Commission, European Central Bank and IMF, known as the troika, are due to return to Athens next month to review Athens’ progress on implementing reforms.
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In an appeal to German public opinion, Samaras told the popular mass-circulation Bild that his country needs more time to effectively implement reforms, but that this would not translate into needing more funds.
“Let me be very clear: we are not asking for extra money,” Samaras was quoted as telling Bild.
“We stand by our commitments and the implementation of all requirements. But we must encourage growth, because that reduces the financing gaps.
“All we want is a little ‘air to breathe’ to get the economy going and increase state income,” Samaras added, without specifying any time frame.
But Merkel on Wednesday dismissed the chances of agreeing on changes to Greece’s bailout package during upcoming talks with the Greek prime minister.
“We won’t have a solution on Friday,” Merkel said on Wednesday during a visit to Moldova.
“We wait for the report of the troika. Then we will decide,” she added in reference to representatives from the EU and its Central Bank as well as IMF who are now auditing Greek finances.
Hinging on a favourable report from the troika is a massive 31.5bn-euro bailout installment ($38.6bn), without which Greece faces a chaotic default on its vast debts and a possible exit from the euro.
A Greek exit would destabilise markets and economies around the world as other vulnerable countries in the eurozone are caught up in investor panic.