France, Germany seek consensus on crisis in Greece | News | DW | 23.08.2012
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France, Germany seek consensus on crisis in Greece

France and Germany are struggling to get their European policies in synch as Greece's fate in the eurozone hangs in the balance. Euro group chief Jean-Claude Juncker said Athens has a "last chance" to implement reform.

French President Francois Hollande met German Chancellor Angela Merkel in Berlin on Thursday, amid pleas from Greece for more time to implement austerity measures.

Socialist Hollande has adopted a more lenient tact toward the eurozone crisis, calling for European debt to be mutualized across member states and for the European Central Bank (ECB) to act as a lender of last resort.

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Juncker opposes looser Greek conditions

But conservative Merkel has continued to emphasize austerity, particularly in the case of Greece, despite mounting pressure from Paris and other European capitals for a change of course.

"I am going into these talks with the intent that every partner sticks to his commitments," Merkel told reporters on Wednesday during a trip to the eastern European nation of Moldova.

Greece asks for more time

Greek Prime Minister Antonis Samaras heads to Berlin on Friday, where he is expected to ask Merkel for an extension of Athens' austerity targets. He is then scheduled to make his case with Hollande in Paris on Saturday.

Greek Prime Minister Antonis Samaras, left, welcomes Jean Claude Junker, Prime Minister, of Luxembourg and President of Eurogroup prior their meeting in Athens, on Wendesday, Aug. 22, 2012.

Juncker has said Greece has one "last chance" to stabilize its finances

In exchange for its bailout package, Athens is required to reduce Greece's national budget deficit to less than three percent of the country's gross domestic product (GDP) by 2014. In 2011, the budget deficit stood at 9.3 percent of GDP.

The 11.5 billion euros ($14.3 billion) in budget cuts are expected to hit pensions, social benefits, public sector wages and health care. Some 40,000 civil servants are also expected to lose their jobs. Politicians in Athens have been struggling to reach a deal, with the cuts required in order for Greece to receive the latest trance of around 31.5 billion euros in international loans.

Samaras told the German daily Bild on Wednesday that Greece was committed to the austerity targets, but needed more flexibility to pull the country's economy out of its fifth year recession.

"All we want is a bit of 'air to breathe' to get the economy running and to increase state income," Samaras said. "More time does not automatically mean more money."

'Last chance'

Samaras met with euro group chief Jean-Claude Juncker in Athens later on Wednesday to discuss Greece's future in the eurozone. Juncker said he was "totally opposed" to the idea of Greece exiting the 17 member currency union, calling it a "major risk" for the entire bloc.

Juncker went on to say that Athens' "priority number one is the consolidation of public finances" as well as "a robust and credible strategy for closing the mid term gap" in its debt on its national balance sheet. He added that Greece had reached a decisive turning point in its economic crisis.

"As far as the immediate future is concerned, the ball is in the Greek court," Juncker said after a two-hour meeting with Samaras. "In fact this is the last chance and Greek citizens need to know this."

slk/ipj (AFP, dpa, Reuters)

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