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Greek prime minister in Germany: need 'time to breathe'

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Aug. 24, 2012, 11:37 p.m. | World — by Associated Press

In this picture provided by the German Government German Chancellor Angela Merkel talks with Prime Minister of Greece Antonis Samaras, right, on the terrace of the federal chancellery in Berlin, Germany, Friday, Aug. 24, 2012. Building in the background is the German parliament Reichstag. (AP Photo/Bundesregierung/Guido Bergmann)
© AP

Associated Press

Associated Press

  BERLIN (AP) — Greece made little immediate progress in its quest for more time to carry out painful cuts during talks between its Prime Minister Antonis Samaras and Germany's Chancellor Angela Merkel Friday.

But the German leader did offer some support to the stricken country, stressing that Berlin wanted to keep Greece in the euro and that it won't rush to make any premature judgments about its reform efforts.

In German and French media this week, Samaras has been arguing that his country should have more time beyond the mid-2014 deadline to complete reforms that are a condition of it continuing to receive bailout loans. Without the help, Greece would be forced into a chaotic default on its debts and could be forced out of the eurozone.

Leading German politicians have voiced deep skepticism about granting Greece any concessions. Merkel and French President Francois Hollande, meeting a day before Samaras came to Berlin, put the onus squarely on Greece to fulfill its pledges.

Athens has faltered in the speed and effectiveness of implementing the reforms — irritating creditors, notably Germany, which is the single largest contributor to its €240 billion ($300 billion) bailout packages. Weeks of political wrangling in Greece that ultimately brought a coalition government under Samaras to power didn't help.

Greece's continued access to the bailout packages hinges on a favorable report next month from the so-called "troika" of the country's debt inspectors — the European Union, European Central Bank and the International Monetary Fund. If Greece is found to have failed on key economic reforms that are conditions of the bailout loan, vital funds could be halted.

"To win back confidence, we must fulfill expectations, and so I made clear in the talks that we of course expect from Greece that the commitments that were made be implemented, that deeds follow words," Merkel said after meeting Samaras.

"But fulfilling expectations also means that Greece can rightly expect from Germany that we do not pass premature judgments," Merkel said, adding that Germany needs to wait for the debt inspectors' report.

Merkel didn't address Samaras' hopes of winning more time to carry out reforms, which he reiterated at Friday's joint news conference, emphasizing that stimulating economic growth is a priority.

"We don't want more aid, we did not ask for more money; but we need time to breathe — it is a big leap that Greece is making," he said. He didn't specify how long that "time to breathe" might be.

Germany's finance minister has argued that giving Greece more time wouldn't solve the country's problems, and the parliamentary caucus leader of Merkel's conservative bloc poured more cold water on the idea Friday. Both question Samaras' assertion that giving Greece more time doesn't have to mean giving it more money.

And Merkel would need approval for any extra funding in Parliament, where lawmakers in her center-right coalition have no appetite for another Greek rescue program.

Merkel said there are "two realities" that need to be reconciled by European leaders.

In Greece, she said, there is the perspective of having suffered through years of recession and being asked now for more painful cuts. "And then there's the other reality expressed by many in Germany that we have for more than two years guaranteed programs, support and a lot of money for Greece and it always comes to that point where what we have expected has not happened, and from that has grown a lot of impatience."

Some German politicians have talked openly about the possibility of Greece leaving the euro. The vice chancellor, Economy Minister Philipp Roesler, has said the idea of a Greek exit has "lost its horror."

However, Merkel repeated on Friday that Germany wants Greece to keep the shared currency.

"I want to say very clearly here ... (and) this is also the aim of the entire German government, that Greece is a part of the eurozone and I would like Greece to remain part of the eurozone," she said.

Friday's meeting "was a good beginning, but it also became clear in the talks that there is a lot to do," Merkel said.

Greece "will stay true to its commitments," Samaras insisted. "To be precise, we are already doing so. I am convinced that the report of the troika will signal that the new coalition government in Greece will soon lead to results."

Samaras will meet Hollande in Paris on Saturday. Continuing a round of financial diplomacy, Merkel will meet next Wednesday with Italian Premier Mario Monti, whose country is struggling with high borrowing costs.

Earlier Friday, the parliamentary leader of Merkel's conservative bloc said he was "very skeptical" about giving Greece more time. "My position is that neither the time nor the position in substance can be renegotiated; Greece must now fulfill its duties," Volker Kauder told ZDF television.

Asked whether the euro would fail if Greece leaves, Kauder replied that rescue funds are in place to help prevent contagion of other countries, so "I would say that this wouldn't be a problem for the euro."

Samaras said it time for an end to talk about Greece leaving the euro.

"Can there be any businessman who invests in this country if he knows that he will invest in euros and get drachma back? No," Samaras said.

"You can imagine that this cacophony ... creates such big problems that one has the impression of fighting for nothing."

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David Rising and Frank Jordans contributed to this story.

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