Papoulias heads for crucial EU summit amid European divisions

Prime Minister Antonis Samaras held on Wednesday a telephone conversation with his Italian counterpart, Mario Monti, ahead of this week?s European Union leaders? summit, which the Greek premier will not be able to attend as he is still recovering from eye surgery.

Details of what was discussed between the two men were not made public but it was the latest conversation Samaras has held with EU leaders, including Germany?s Angela Merkel, this week as he tries to set out Greece?s position on its bailout.

While Greece?s problems will not dominate the agenda, it will be a first opportunity for the new coalition government to state its case for substantial changes to its fiscal adjustment program

President Karolos Papoulias was holding final meetings with government officials in Athens on Wednesday before flying to Brussels in the afternoon ahead of the summit, which starts on Thursday.

Papoulias will represent Greece as Prime Minister Antonis Samaras is recovering from the operation he had on Saturday to repair a damaged retina.

Papoulias was meeting again with Development Minister Costis Hatzidakis, Finance Minister Giorgos Zannias and Alternate Finance Minister Christos Staikouras. The President met the three cabinet members on Tuesday but Wednesday?s incoming Finance Minister Yannis Stournaras was also due to take part in the second round of talks after accepting the position on Tuesday afternoon.

Papoulias will be accompanied by Hatzidakis, Zannias and Staikouras. Foreign Minister Dimitris Avramopoulos will also be part of the Greek delegation.

Avramopoulos had originally been lined up to represent Greece but European Union rules demand that either heads of government of heads of state attend the meeting.

Papoulias will also be carrying a letter from Samaras to his EU counterparts. Kathimerini understands Samaras will not make reference to specific changes to the bailout terms but will point out that the deepening recession and rising unemployment mean the program needs to be adjusted.

The mood among European leaders appeared divided ahead of the summit, with Merkel saying total debt liability would not be shared in her lifetime and giving little support to Italian and Spanish pleas for immediate crisis action.

Rome and Madrid have seen their borrowing costs spiral to a level which for Spain at least would not be sustainable as it battles to recapitalise banks ravaged by a burst property bubble and cut a towering government deficit.

Spanish Prime Minister Mariano Rajoy said on Wednesday he would ask other European Union leaders to allow the bloc’s bailout funds or the European Central Bank to stabilise financial markets.

Speaking in parliament before a meeting of European heads in Brussels on Thursday and Friday, Rajoy warned that Spain would not be able to finance itself indefinitely with 10-year bond yields near seven percent.

“The most urgent issue is the one of financing. We can’t keep funding ourselves for a long time at the prices we’re currently funding ourselves,» he told parliament.

The leaders held an unusually discordant news conference in Rome on Friday. Hollande said there must be more solidarity in Europe before countries hand over more sovereignty over their national budgets, while Merkel said she would not accept extra liabilities without overarching budget control.

In Rome, Monti said he would not simply rubber stamp conclusions at the EU summit and said he was ready to go on negotiating into Sunday evening if necessary to agree on measures to calm markets.

With Hollande’s support, Monti is pushing for the eurozone’s rescue funds to be used to help limit the spreads over German Bunds on bonds issued by countries that respect EU budget rules. Rajoy would settle for that or the European Central Bank doing the same job by reviving its bond-buying programme.

The proposal has run into stiff opposition from Germany and has been rejected by Jens Weidmann, the powerful head of the German central bank, the Bundesbank.

[Kathimerini English Edition

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