BERLIN (AP) — 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 17 countries that use the euro.
The first round of shuttle diplomacy began today with Germany’s foreign minister, Guido Westerwelle, hosting his Greek counterpart, Dimitris Avramopoulos, ahead of a meeting in Berlin on Friday between their countries’ leaders, Chancellor Angela Merkel and new Prime Minister Antonis Samaras.
French President Francois Hollande visits Berlin on Thursday for discussions with Merkel 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 Wednesday.
Meanwhile, Greece’s finance officials were working today to secure (euro) 11.5 billion ($14.19 billion) in spending cuts necessary for it to continue receiving the international funding that is protecting it from bankruptcy.
The eurozone is awaiting a report next month on Greece’s progress in implementing reforms and austerity measures demanded in exchange for two massive bailout packages. The report is being compiled by the socalled “troika” — representatives of the European Union, European Central Bank and International Monetary Fund.
Greece has been dependent on two multi-billion international bailouts from other eurozone countries and the International Monetary Fund since its debt crisis broke in 2010. But despite taking a series of harsh austerity measures that saw salaries and pensions slashed and repeated rounds of tax hikes, the results have not been what European and Greek officials hoped for.
The country has fallen behind on implementing the reforms and austerity measures, fueling impatience in Germany and other eurozone countries and speculation that Greece will have to leave the euro — a move that would further destabilize the currency bloc and threaten the economies of countries such as the U.S. and China.
Samaras’ fragile threeparty 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 are making clear they have no appetite for granting Greece more time to comply with the terms of its rescue packages or other concessions.
Finance Minister Wolfgang Schaeuble said on Saturday: “I have always said that we can help the Greeks, but we cannot responsibly throw money into a bottomless pit.” The parliamentary leader of Merkel’s conservative bloc, Volker Kauder, has insisted that there is no room for giving Greece more time and says he sees little chance of Germany’s governing coalition supporting a third rescue package.
Germany’s vice chancellor, Economy Minister Philipp Roesler, said recently the idea of Greece leaving the euro has “lost its horror.”
Top European Central Bank official Joerg Asmussen said that he wants Greece to remain in the eurozone and that “securing that is in the hands of Greece.”
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