EUROPE’S LEADERS are gearing up for a high-stakes week of financial diplomacy that could determine Greece’s future — and the stability of the 16 other countries, including Ireland, that use the euro.
The first round of the talks began today when Germany’s foreign minister, Guido Westerwelle, hosted his Greek counterpart Dimitris Avramopoulos in a curtain-raiser to talks between their respective leaders, Angela Merkel and Antonis Samaras, on Friday.
Westerwelle said afterwards that Greece needs to meet its reform commitments, offering that “a substantial softening of the agreements and the agreed reforms is not possible from the German government’s point of view.”
He added that Germany “wants us to remain together in the eurozone” but that “the key to success lies in Athens.”
Neither Westerwelle nor Avramopoulos would be drawn on whether Greece can or should get more time to fulfill its austerity and reform targets, insisting that they would wait for a Troika report on Greece’s progress which is due next month.
Avramopoulos underlined Greece’s will to implement its reform plans and cautioned against careless talk about Greece’s future. “We need responsibility,” he said through an interpreter. “There must no longer be … the speculation about Greece’s position in the euro or outside the euro.”
French president Francois Hollande will meet Merkel in Berlin on Thursday, and then will meet Samaras in Paris on Saturday.
Jean-Claude Juncker, the Luxembourg prime minister who chairs the eurozone finance ministers’ meetings, is due in Athens to meet Samaras on Wednesday.
Meanwhile, Greece’s finance officials are still hammering out a €11.5 billion package of spending cuts which Samaras considers necessary if Greece is to continue receiving the international funding that is protecting it from bankruptcy.
Despite taking a series of harsh austerity measures that saw salaries and pensions slashed and repeated rounds of tax hikes, the financial outcome has not been what European and Greek officials hoped for: Greece has fallen behind on implementing the reforms and austerity measures.
Should the Troika’s report find that Greece has not been meeting its bailout commitments, the country could face the prospect of having its funding cut off, forcing it into a chaotic default that would probably mean leaving the eurozone and triggering a new wave of panic about the currency’s future.
Samaras’ fragile three-party coalition government, formed after two elections in May and June, has said it hopes to renegotiate parts of the unpopular bailout conditions, mainly seeking an extension in the two-year austerity deadline.
But German officials and lawmakers have made it clear they have no appetite for granting Greece more time to comply with the terms of its rescue packages or other concessions.