Germany said to consider offering Tsipras staggered deal on aid
Chancellor Angela Merkel’s government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds, according to two people familiar with Germany’s position.
While the Germans still insist on a package of steps that includes higher taxes, state asset sales and less generous retirement benefits, they may settle for a clear commitment by the Greek government to a measure up front to unlock aid, said the people, who asked not to be identified discussing the government’s negotiating stance.
With Greece’s aid program set to expire on June 30 and no deal in sight, the comments reflect more German flexibility than the government’s public statements. Merkel and French President Francois Hollande may hold talks with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit on Wednesday to try to break the impasse.
“Where there’s a will, there’s a way,” Merkel told reporters as she arrived in Brussels. “The goal is to keep Greece in the euro area.”
Merkel says Greece must honor an accord struck with its euro-area partners in February that gave Tsipras an extra four months to carry out economic reforms needed to unlock its final aid installment of 7.2 billion euros ($7.6 billion). The chancellor hasn’t spelled out details of a possible deal in public and said that whatever measures Tsipras undertakes, they have to “add up” to make Greece’s debt load sustainable.
Giving Time
While Tsipras could be given until next year to carry out changes, such as trimming retirement benefits, he would have to initiate at least one major overhaul if he wants to get aid flowing, the people said. Neither person specified which demand Greece should fulfill.
Merkel’s chief spokesman, Steffen Seibert, and his deputy Christiane Wirtz didn’t return text messages seeking comment. A German Finance Ministry spokeswoman declined to comment.
To convince creditors that Greece is serious, Tsipras would have to take tangible action, for instance introducing reform legislation in the Greek parliament, one person said. If Greek officials move quickly, funds could be released in early July, the person said.
Germany also wouldn’t object to extending the aid program again if Tsipras presents specific policies to meet the goals of the memorandum of understanding agreed with Greece’s euro-area partners on Feb. 20, the people said. They didn’t say how long such an extension might run.
[Bloomberg]
