Greece wants to win over skeptical lenders

Greece’s new leaders announced a trans-Atlantic roadshow on Monday to try to persuade skeptical lenders to give them more time to repay the country’s massive debt, as hopes faded for any real progress on the issue at this week’s European summit.

Unexpected medical problems will prevent Prime Minister Antonis Samaras and incoming Finance Minister Vassilis Rapanos attending the June 28-29 summit in Brussels. The problems also forced the postponement on Monday of the first meeting between the new government and Greece’s «troika» of international lenders.

Samaras’s government, an unlikely alliance of right and left that emerged from a June 17 election, has promised angry Greeks it will soften the punishing terms of a bailout saving them from bankruptcy in exchange for deep economic pain.

Eurozone paymaster Germany has already rejected major concessions.

Berlin signalled on Monday that Europe would wait for the troika’s report on Greece before taking any decisions on how to adjust the bailout package to compensate for weeks of political paralysis and a deeper than expected recession. A new date for the troika visit has not been set.

Samaras, 61, emerged from hospital on Monday with a bandage over one eye, two days after undergoing surgery to repair a damaged retina. He was under orders not to fly or make the long road trip to Brussels, doctors said.

Rapanos, a mild-mannered banker reported by Greek media to have a history of ill-health, will be discharged on Tuesday after being rushed to hospital on Friday, before he could be sworn in, complaining of abdominal pain, nausea and dizziness.

The 64-year-old underwent a gastroscopy and colonoscopy, an official at the Hygeia Hospital told Reuters on condition of anonymity. The tests, «showed everything is completely normal.”

Speaking to Mega TV, government spokesman Simos Kedikoglou said Rapanos had told Samaras on Friday, after being offered the job, that he had a «chronic situation» that he had learned to live with and that it would not effect his ability to do the demanding and stressful job.

The government said Samaras and the leaders of his two coalition allies would take their case for renegotiating the bailout conditions to Europe and the United States as soon as the prime minister was well enough.

“We discussed with Mr Samaras that it would be meaningful, irrespective of the one-to-one discussions we have with our counterparts or with other crucial people, to also organize a common appearance at the decision-making centers,» said Evangelos Venizelos (photo), leader of the Socialist PASOK party.

“These are Brussels, Frankfurt, but also Washington because of the International Monetary Fund, and of course the capitals of the big European countries which take part in discussions on the eurozone’s future,» he told reporters.

At the two-day EU summit starting on Thursday, Greece will be represented by Foreign Minister Dimitris Avramopoulos and outgoing Finance Minister George Zanias in a delegation headed by President Karolos Papoulias.

Avramopoulos and Zanias met on Monday to discuss tactics, working from a government programme that calls for tax cuts, extra help for the poor and unemployed, a freeze on public sector lay-offs and two more years to bring Greece’s deficit under control.

Much of this program, agreed by the coalition over the weekend, would unravel basic elements of a bailout agreement reached with lenders as recently as March.

It is a wish-list that Germany will almost certainly reject and the new government is keenly aware that there is a mountain to climb in winning a softening of the bailout terms.

“We have facts and data to show the medicine is not working,» a government official, who declined to be named, said after the Avramopoulos-Zanias meeting. «The recession is very deep and unemployment (at almost 23 percent) is very high.”

He warned of «long and tough» negotiations. «Our primary aim will be to reinvigorate the economy and provide relief to the sectors of society that are hurting the most.”

The coalition of Samaras’s conservative New Democracy, PASOK and the small Democratic Left party faces an emboldened opposition committed to tearing up the terms of the bailout if it ever gets into power.

Critics and much of the population argue that the terms are only driving Greece ever deeper into recession and fraying the edges of society. But Germany is unsympathetic, frustrated by the slow pace of reform in Greece.

The debt crisis that began in Athens in 2009 is now engulfing Italy and Spain, the single currency’s third and fourth largest economies.

EU trust in Harvard-educated Samaras is at a low ebb, after he opposed Greece’s first bailout of 110 billion euros in 2010 and only reluctantly backed the second.

“The most important task facing new Prime Minister Samaras is to enact the program agreed upon quickly and without further delay instead of asking how much more others can do for Greece,» German Finance Minister Wolfgang Schaeuble told Bild am Sonntag. [Reuters]

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