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German, Greek officials meet over bailout terms

Source : BUSINESS_STANDARD
Last Updated: Mon, Aug 20, 2012 19:22 hrs

Germany’s foreign minister hosted his Greek counterpart on Monday in the first of a series of meetings to be held in the German capital this week that could help determine Greece’s future in the 17-nation Euro zone.

Time, and whether Greece should be granted more of it, is expected to be at the focus of talks between the Greek foreign minister, Dimitris Avramopoulos, and Guido Westerwelle of Germany. Westerwelle has pointed out that parliamentary elections in Athens earlier this year cost the country valuable weeks to implement the budgetary and reform commitments agreed to in exchange for two bailout packages that have made life tough for Greeks.

The Greek prime minister, Antonis Samaras, is also expected to push for a two-year extension when he arrives in Berlin to meet with Chancellor Angela Merkel on Friday. Yet German lawmakers have made it clear they feel they have given enough and expect to see Greece uphold its end of the agreements drawn up with the European Union, the European Central Bank and the International Monetary Fund in exchange for two huge bailouts.

European leaders are awaiting the results of a progress report, expected next month, by representatives of the troika on how far Greece has been able to uphold its commitments, or whether the country could face the prospect of having its funding cut off, triggering a chaotic default on its debts that could force it to leave the Euro zone. The German weekly Der Spiegel reported, without citing sources, that Greece’s financial shortfall might be larger than expected, up to €14 billion over the next two years, instead of the €11.5 billion that has so far been identified.

Siebert, Merkel’s spokesman, refused to be drawn on what might come out of the chancellor’s meetings this week, but he sought to dampen expectations. “The central theme for the German government will be: We will do what is best for the euro,” Seibert said.

In an interview published Monday by Germany’s Berliner Zeitung and Frankfurter Rundschau newspapers, a top European Central Bank official, Jörg Asmussen, said that he wanted Greece to remain in a member of the common currency and that “securing that is in the hands of Greece.”

“A withdrawal by Greece would be manageable,” Asmussen, was quoted as saying. But “a withdrawal would not be as orderly as some imagine. It would be connected with lower growth and higher unemployment, and very expensive. In Greece, in the whole of Europe and in Germany too.”

Merkel is to meet with François Hollande, the president of France, the evening before she welcomes Samaras, who then travels to Paris on Saturday. Hollande has been more willing to grant more concessions to Greece and is expected to urge Merkel to soften her stance.

Siebert, Merkel’s spokesman, refused to be drawn on what might come out of the chancellor’s meetings this week, but he sought to dampen expectations. “The central theme for the German government will be: We will do what is best for the euro,” Seibert said.


© 2012 The New York Times News Service




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