Merkel offers limited support to Greece

German Chancellor Angela Merkel expressed her support on Tuesday for Greece?s efforts to rescue its economy from collapse and put its public finances in order but stopped short of giving Prime Minister George Papandreou any tangible evidence of Berlin?s backing.

Sources said that during their meeting in Berlin, Merkel failed to give any concrete assurances about supporting Greece?s bid to improve the terms of the 110-billion-euro package when European Union leaders meet next month. However, the atmosphere in the news conference after the pair met appeared particularly friendly.

?Angela, I want to thank you very much for what you have done, your support and your friendship,? said Papandreou before suggesting Greece and Germany could work more closely on tourism and ?green growth.?

?Greece has started to put its house in order,? said Merkel. ?We have been watching this with satisfaction because we know that this requires political boldness.?

However, the German chancellor said she feels there is still a lot of work for Athens to do. ?I believe that there are still some more things for Greece to do and the more decisive that it is in following the necessary policies, the more Germany will believe that it can succeed.?

Merkel left journalists in no doubt that she supported the euro, despite criticism from various quarters that she is being ?un-European.?

?We know that we need the single currency,? she said. ?We are all focused on the euro.?

Merkel and Papandreou?s meeting was preceded by talks between Finance Minister Giorgos Papaconstantinou and his counterpart Wolfgang Schauble. Following the two meetings, Greek diplomatic sources said they felt confident that Germany would in the end support the repayment period for Greece?s emergency loans being extending to 10 or 11 years from three years when the matter is discussed at an EU leaders? summit on March 24 and 25. Athens is less confident that Berlin will back a lowering of the interest rate Greece is being charged.

Although Papandreou has expressed his agreement with the ?competitiveness pact? proposed by France and Germany, which calls for an end to inflation-linked wage rises and for retirement ages to reflect life expectancy, Greece fears other EU members will reject the proposals and that this will scupper the chances of agreeing on a comprehensive structure to deal with debt crises in the eurozone, leaving Athens isolated.

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