Belfast Telegraph

Monday 5 October 2015

Greece 'needs more time' to halt further euro panic

Published 23/08/2012

Greece needs more time to implement tough financial reforms and spending cuts, Prime Minister Antonis Samaras said as he began a series of top-level European meetings to discuss the debt-ridden country's bailout.

Jean-Claude Juncker, head of the Eurogroup, the body representing the finance ministers of the 17 eurozone countries, arrived in Athens to meet Mr Samaras.

The Greek premier then heads to Berlin later this week to meet Chancellor Angela Merkel and on to Paris to see President Francois Hollande.

Greece is dependent on two international rescue loan packages from other eurozone countries and the International Monetary Fund (IMF), which are preventing it from bankruptcy and potentially having to leave the euro.

In return, it has had to impose strict austerity measures, including cuts to salaries and pensions and repeated tax hikes. But Athens has faltered in the speed and effectiveness with which it has implemented the reforms, fuelling impatience by its creditors, notably Germany, the single largest contributor to the bailout.

The so-called 'troika' of debt inspectors that oversee Greece's bailout programme - the European Union, European Central Bank and the IMF - are due in Athens next month to assess and report on how well the country has stuck to the terms of the deal.

Hinging on a favourable report from the troika is a massive bailout installment, without which Greece faces a chaotic default on its vast debts and a possible euro exit.

A Greek exit could destabilise markets and economies around the world as other vulnerable countries in the eurozone are caught up in investor panic.

Mr Samaras said that, while Greece needs more time to restart its economy, this did not mean more funds.

"Let me be very clear: we are not asking for extra money. We stand by our commitments. All we want is a little 'air to breathe' to get the economy going," he said.

Mrs Merkel downplayed expectations of her meeting with Mr Samaras. "We will not find solutions on Friday - we will wait for the troika report. Then the decisions will be made.''

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