The release of Greece’s next tranche of bailout funding should be secured in November if the government agrees on its latest austerity package with the troika and pushes ahead with 89 structural reforms that form part of its bailout commitments, German Chancellor Angela Merkel informed Prime Minister Antonis Samaras during a brief but significant visit to Athens on Tuesday.
Merkel’s visit did not provide an expression of unquestioning support for Greece’s continued eurozone membership, but there were words of encouragement for Greeks and their government from the German chancellor, who acknowledged the large fiscal adjustment made since 2010 and a renewed effort to implement reforms.
The Greek side felt Merkel’s trip underlined the government’s efforts to rebuild trust with the country’s eurozone partners and doused the possibility of a euro exit. According to sources, Athens was also encouraged by the emergence of an apparent timeline for the disbursement of the next loan installment and the consideration of Greece’s request for the 13.5 billion euros in spending cuts and tax hikes demanded by the troika to be spread over more than two years.
Finance Minister Yannis Stournaras, who attended a Eurogroup meeting on Monday, confirmed last night that the request for an extension is “on the table” and that eurozone finance ministers have asked the government to find ways of plugging the financing gap that this could create. He added that he expects Greece to receive its next tranche, worth 31.5 billion euros, next month.
Greece hopes to have agreed on the austerity package with the troika before the European Union leaders’ summit on October 18 and that a decision on releasing the funds for Athens could be taken at a subsequent emergency Eurogroup meeting. Sources said that all of these issues were discussed in Tuesday’s meeting between Samaras and Merkel.
At a press conference, Merkel said Greece must honor its commitments to its international creditors, noting that “much has been achieved but much more remains to be done.” She stressed she was not visiting Greece “as a teacher, to give grades” but “as a good friend and a real partner.”
The German leader acknowledged that “this period is very difficult for Greeks” but called for citizens to be patient. “Much of the road has been completed but it is worthwhile for Greece to finish the course as if it doesn’t things will be much harder later.”
Merkel added that Germany was prepared to help Greece implement measures to boost growth. “We will do everything possible to provide Greece access to credit from the European Investment Bank,” she added, noting that the bank’s capital had been boosted by 10 billion euros.
Samaras also emphasized the importance of restoring growth to the economy to boost employment, particularly among young Greeks. “The recession is the enemy,” he said. “Greek people are bleeding but we are determined to remain in Europe,” he said, adding that those who had bet on Greece leaving the euro had failed.
Hailing Merkel as “a friend of Greece,” Samaras said her visit has “broken our international isolation” and “turned a new page in ties between Greece and Germany.” “Greece has boosted its credibility,” he said.
Merkel suggested that Europe also had something to prove in this area. “It is in our common interest that we in Europe once again win back our credibility and solve our problems together,” she said.
Samaras took the unusual step of meeting Merkel at Athens International Airport and traveling to his office at the Maximos Mansion in the same car as her. The vehicle carrying the two leaders was part of a large convoy that made its way through Athens amid stringent security. After her meeting with Samaras, Merkel held talks with President Karolos Papoulias and then met Greek and German businessmen before returning to Berlin.