Austria: Greece could get more time to repay debts

Greece should get more time to repay its debts provided that it sticks to reforms and savings targets agreed with the European Union, Austrian Chancellor Werner Faymann said, taking a softer line than neighbour Germany, which has so far opposed any delay.

Greece’s future and whether it stays in the euro zone is expected to be shaped by a series of crunch meetings next month and a progress report from European Union and IMF inspectors on public sector cuts required in exchange for billions in aid.

Germany and France both said after meetings with Greek Prime Minister Antonis Samaras this week that Greece’s leaders must show their commitment to reform, and Germany is showing little inclination to consider any delay.

But Austria and others in the euro zone’s «core» of stronger economies have often provided advance warning throughout three years of crisis of the line the bloc’s leaders will finally take.

“I see quite a good chance that we will arrive at an outcome with Greece that the Greeks stick to their agreements with the EU but in return get more time for the repayment,» Faymann told newspaper Oesterreich in an interview published on Sunday.

“The most important thing is that the Greeks stick to the reforms and savings targets agreed with us. If that is guaranteed, I am in favour of a delay in the repayment,» he said, adding that the delay could be two or three years.

German Economy Minister Philipp Roesler reaffirmed Germany’s stance in an interview with broadcaster ZDF on Sunday.

“The request of the Greeks for a half year or even two years more (to implement their reforms) cannot work because it is not only a question of time… Everybody must recognise that time always means also money,» he said.

“If the reforms are not undertaken there can be no further aid,» Roesler said in comments that echoed those of German Finance Minister Wolfgang Schaeuble in an interview published in the Tagesspiegel on Sunday newspaper.

The head of Germany’s Bundesbank stepped up his opposition to the European Central Bank’s latest moves to battle the euro zone’s debt crisis on Sunday, saying that plans to buy bonds risked becoming a drug on which governments would get hooked.

The ECB is being forced to take a greater role in preventing the crisis from engulfing Spain while governments negotiate legal and political hurdles, but the Bundesbank wants to limit the scope of central bank action, and a rift within the ECB is deepening.

Faymann, a Social Democrat, said he was optimistic that Greece would stay in the euro zone, but said the scale of the crisis and of unemployment in Greece was so great that the country would not manage to do so without a repayment delay.

“But nothing is decided yet,» he said. «After the troika’s report in the middle of September we will see clearly.”

French President Francois Hollande also said on Saturday that Greece, where unemployment has hit a record 23 percent, must not push its people too far.

Austrian Finance Minister Maria Fekter, a member of the conservative People’s Party that governs in coalition with the Social Democrats, argued against giving Greece more time.

“To extend the time again now without changing something is not on,» she told Switzerland’s NZZ am Sonntag newspaper, in an interview published after her visit to Zurich this week.