Merkel and Hollande to offer Greece little comfort over bailout terms

Merkel and Hollande expected to give little leeway to Samaras over bailout agreement

PUBLISHED : Friday, 24 August, 2012, 12:00am
UPDATED : Friday, 24 August, 2012, 3:53am


Angela Merkel and Francois Hollande are expected to tell Greek Prime Minister Antonis Samaras this week that they can give him little leeway on easing the terms of his country's bailout agreement.

The French and German leaders were scheduled to meet later yesterday to fine-tune their joint message to Samaras, who is on a charm offensive seeking more time for Athens to meet its bailout commitments.

Merkel receives Samaras today and Hollande receives him tomorrow, at a moment of rare optimism on financial markets that the European Union - especially the European Central Bank - is poised for decisive action on the euro-zone debt crisis.

German Finance Minister Wolfgang Schaeuble noted that it's only a few months since creditors drew up a second bailout package and agreed on a massive debt writedown for Greece.

"You cannot just say after half a year, all of that is not enough, because then you will never win the confidence of financial markets," Schaeuble said. "So more time is not a solution for the problems. The question is how we win back confidence." Merkel herself poured cold water on far-reaching concessions on Wednesday.

"I am going into these talks with the awareness that we have to achieve that every partner sticks to his commitments," Merkel said during a trip to Moldova.

Samaras is hoping creditors will let him spread out painful economic reforms over four years instead of two.

"All we want is a bit of 'air to breathe' to get the economy running and to increase state income. More time does not automatically mean more money," Samaras told the German daily Bild in an interview.

In a country that is tiring of repeated bailout requests from its weaker euro-zone partners, German officials defer questions about giving Athens more latitude to the results of a "troika" mission by the EU, ECB and International Monetary Fund, which are due in September.

But Berlin and Paris may meet halfway, with signs that Merkel's conservatives, if not ready to postpone the targets, may be ready to show Athens other leeway if the troika finds it meeting the broad terms of its rescue package.