By Rainer Buergin - Aug 22, 2012 10:50 AM GMT+0400
Greek Prime Minister Antonis Samaras called for “more time” to carry out policy changes to deal with his nation’s debt crisis before receiving Luxembourg Prime Minister Jean-Claude Juncker in Athens today.
“All we want is a little more air to breathe to get the economy going and increase government revenue,” Samaras was quoted as saying in an interview with Germany’s Bild newspaper today. “More time doesn’t necessarily mean more money.”
Antonis Samaras, Greece's prime minister. Photographer: Angelos Tzortzinis/AFP/Getty Images
Limited concessions to Greece are possible as long as they are made within the framework of the second aid program for the over-indebted country, Norbert Barthle, the parliamentary budget spokesman for Chancellor Angela Merkel’s Christian Democratic Union, said yesterday.
Almost three years after the crisis started in Greece, the country remains at the heart of the turmoil even as contagion spreads to Italy and Spain, prompting European Central Bank chief Mario Draghi to announce proposals to re-enter the bond market to help lower government borrowing costs.
The euro rose to six-week highs yesterday against the U.S. dollar and yen before euro region leaders meet this week to discuss Greece’s fiscal adjustment program amid optimism the European debt crisis is being contained. French President Francois Hollande is due in Berlin tomorrow for talks on the crisis with Merkel.
Samaras, whose government favors an extension of its fiscal adjustment program by two years, travels to Berlin and Paris on Aug. 24 and Aug. 25 to discuss the country’s deficit reduction efforts as part of terms to receive European help to tackle its debt crisis.
Restructure Debt
Germany would be “ill-advised” to allow the euro region to break up, Adam Posen, a member of the Monetary Policy Committee at the Bank of England, said in an interview with the BBC. It is in Germany’s commercial and economic interest to restructure the debt of euro-zone countries in trouble, Posen said.
Samaras told Bild his government is making progress carrying out “structural reforms” and selling state assets. Greece stands by its commitments even after the economy contracted by a fifth over the past three years, the standard of living dropped by a third, pensioners lost a fifth of their incomes and half the country’s youth is unemployed, he said.
Abandoning Greece now would increase uncertainty and the vulnerability of the other euro states and lead to dramatic consequences in financial markets, Samaras said, urging that the “spirit of the European Union” must be preserved.
To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
