Greek PM in Germany: Need 'time to breathe'

[August 24, 2012]  BERLIN (AP) -- Greece's prime minister is telling Germany that his country needs "time to breathe" as it carries through painful reforms and spending cuts.

Chancellor Angela Merkel didn't immediately respond to Prime Minister Antonis Samaras' call for more time to implement reforms when the two leaders met Friday.

But Merkel stressed that Germany wants Greece to remain in the 17-nation euro and said Berlin won't pass premature judgment on Athens' reform efforts ahead of a report next month from Greece's international debt inspectors.

Leading German politicians have voiced deep skepticism about granting Greece significant concessions as it implements unpopular reforms and cuts.

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The new Greek prime minister's hopes of winning more time from creditors to implement reforms and spending cuts faced a tough test in deeply skeptical Germany on Friday as he met Chancellor Angela Merkel.

Merkel greeted Prime Minister Antonis Samaras at the chancellery with a businesslike handshake and military honors. A day earlier, she and French President Francois Hollande -- the leaders of the 17-nation eurozone's two biggest economic powers -- pressed Greece to keep pushing through painful reforms and made no mention of his hopes for more leeway.

In a charm offensive in German and French media this week, Samaras has been arguing that his nation 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.

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.

A German official speaking on condition of anonymity to discuss the informal Merkel-Hollande talks said the leaders agreed that credibility is key to overcoming the crisis and they would underline that in meetings with Samaras.

Ahead of the Berlin talks, the Greek financial newspaper Naftemporiki said Samaras would seek to "restore our country's credibility" by arguing that Greece "has already made important steps towards fiscal stability and pushing through structural reforms."

The Athens newspaper Kathimerini said Samaras will succeed only if he maintains the support of his coalition partners and the Greek voters "and if our foreign partners agree to give Greece some breathing space."

But Athens has faltered in the speed and effectiveness of implementing the reforms, irritating its creditors, notably Germany, which is the single largest contributor to its (EURO)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.

"For me, it's important that we all stand by our commitments, and in particular await the (publication of) the troika report, to then see what the result is," Merkel said at the beginning of her meeting with Hollande. "But I will encourage Greece to follow the path of reform, which demands a lot of the Greek people."

Hollande stressed: "I want Greece to remain in the eurozone. That's my wish. That's our wish." But he added that "of course Greece must make the necessary efforts for this to happen."

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

German officials question Samaras' assertion that giving Greece more time doesn't have to mean giving it more money. And Merkel would have to get approval for any extra funding in Parliament, where lawmakers in her center-right coalition have no appetite for another Greek rescue program.

"Nowhere is the saying that time is money so true as in this case," Volker Kauder, the parliamentary leader of Merkel's conservatives, told ZDF television. "And we cannot make more money available."

He said he was "very skeptical" about giving Greece more time. While he stressed that Europe must wait for the troika's report, he said: "my position is that neither the time nor the position in substance can be renegotiated; Greece must now fulfill its duties."

Some German politicians -- though not Merkel or her finance minister -- have talked openly in recent weeks about the possibility of Greece leaving the euro, and the vice chancellor, Economy Minister Philipp Roesler, has said that the idea of a Greek exit has "lost its horror."

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

[Associated Press]

Elena Becatoros in Athens contributed to this report.

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