Prime Minister Antonis Samaras is expected to remain in Pylos, in the Peloponnese, until Sunday, when he will return to Athens to prepare for a crucial week of meetings that will include talks with German Chancellor Angela Merkel, when the premier is expected to raise the issue of an extension to its fiscal adjustment period.

Sources suggest that Samaras will not meet with his coalition partners, PASOK’s Evangelos Venizelos and Democratic Left’s Fotis Kouvelis, at the beginning of this week, although the three leaders are in contact over the finalization of the 11.5 billion euros of spending cuts requested by the troika.

Samaras would like to have the measures agreed before Eurogroup chief Jean-Claude Juncker visits Athens on August 22. This meeting will be followed by one with German Chancellor Angela Merkel on August 24 and French President Francois Hollande on August 25.

The premier hopes that finalizing the savings will put him in a stronger negotiating position with his eurozone counterparts ahead of the crucial decisions that have to be taken next month. Extending the deadline for Greece’s fiscal adjustment from the end of 2014 to 2016 is expected to top Samaras’s agenda.

Merkel and Samaras are expected to discuss the economic and fiscal situation in Greece and the progress the country has made with its reforms, German government spokesman Steffen Seibert said on Wednesday

"The chancellor will of course first listen to what Mr Samaras has to say about the situation in Greece and about the implementation of its program,” Seibert said.

“For her, as for the rest of the German government, the agreed memorandum of understanding which sets out what the Greeks must achieve and which remains valid for us, forms the basis for working together with or helping Greece."

"For all governments, not just the German government, the troika report will be the basis on which we decide how to proceed,» Siebert said

An extension would mean Greece's bailout package may have to be increased by 20-50 billion euros, according to estimates by some euro zone officials and economists, and there is no appetite in the euro zone to give Greece yet more money.

However, European policymakers are already working on «last chance» options to bring Greece's debts down and keep it in the euro zone, with the ECB and national central banks looking at taking big losses on the value of their bond holdings, euro zone officials have told Reuters.

The latest aim is to reduce Greece's debts by a further 70 billion -100 billion euros, several senior euro zone officials familiar with the discussions told Reuters, cutting its debts to a more manageable 100 percent of annual economic output. Citing a Greek government document, the Financial Times reported on Tuesday that Greece put the price tag of a two-year extension at 20 billion euros.

According to the report, Athens hopes to cover that amount without help from its euro zone partners, tapping an existing IMF loan, short-term debt sales and a possible postponement of debt repayments from the first EU/IMF loan it obtained in 2010.

[Kathimerini & Reuters]