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Samaras wants more time to enact reforms as Juncker heads to Athens

Publish Date22/08/2012 10:33:08 AM

Last Update22/08/2012 11:27:14 AM

Samaras wants more time to enact reforms as Juncker heads to Athens

The Greek Prime Minister Antonios Samaras is expected to ask the Eurogroup chief to look over the deadline of the structural reforms that the government needs to implement in order to revive growth and secure the next tranche of his country`s bailout package.

"All we want is a little more air to breathe to get the economy going and increase government revenue," Samaras was quoted speaking in an interview with Germany`s Bild newspaper, two days before he travels to Berlin and then to Paris to even buy more time to enact reforms and budget cuts in exchange for international funds.

"More time doesn’t necessarily mean more money", Samaras told the German daily, where the rejected the suggestion that it might be better for Greece to leave the 17-nation euro and bring back its former Drachma, which could result in a "catastrophe for Greece".

“It would mean at least five more years of recession and push unemployment above 40 percent,” he was quoted as saying. “A nightmare for Greece: economic collapse, social unrest and an unprecedented crisis of democracy.”

It is time, not money, what matters for Samaras, whose government favors a stretch of its fiscal reform by two years. The clock is ticking and Samaras must convince lenders that Athens must carry out implementing harsh reforms and spending cuts.

Nonetheless, an extension of Greek economic reforms is apparently not a favorable option for Germany, where officials and lawmakers have made it clear they would oppose, given the huge amount of risks amid speculation that Greece will soon leave the common currency.

Samaras has less than two weeks, after the troubled country has fallen behind targets agreed as conditions of its bailout deal, majorly due to three months of political turmoil as it struggled to form a government after two indecisive elections.

The Greek Premier meets with Luxemburg Prime Minister Jean-Claude Juncker today to discuss his country`s request for an extension in its fiscal adjustment target. Juncker is expected to give positive feedback about Greece`s state of economy.

Another heavy round of talks will be held between Samaras and German Chancellor Angela Merkel on Friday, and then he will meet French President Francois Hollande the day after, where he seeks to reassure the Eurogroup that spending cuts is well underway.

The single currency was steady near a six-week high, while speculation has grown that the European Central Bank will act to stem the constantly high borrowing costs in Spain and Italy, however the ECB had sought to overshadow speculation of such plan late on Monday.

Greece`s debt totals more than 300 billion euros and its economy is striving desperately to end a fifth year of recession, with unemployment stalled above 23 percent, together may force further delay in implementing reforms and austerity measures.

Under the same terms of its 130-billion-euro bailout agreed in March, Greece is required to admit an additional spending cuts worth 5.5 percent of the GDP, or about 11.5 billion for 2013 and 2014, however the total size of austerity stays at 13.5 billion euros.

The Troika, trio of European Commission, International Monetary Fund and European Central Bank is assessing the state of Greece`s economy and expected to response back next month for a verdict on whether they will keep funds intact to the debt-throttled nation.


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