German Chancellor Angela Merkel delivered a stern warning to visiting Prime Minister Antonis Samaras after extensive talks about the Greek bailout programme in Berlin.
“We expect Greece to deliver all that has been promised,” Merkel declared. In remarks that were unusually sharp for a joint news conference, she stressed that Berlin has heard words in the past but now expects deeds.
The tough talk contrasted sharply with the head of state honours and diplomatic smiles with which Samaras was received on his first official visit, complete with red carpet and band.
Merkel said that Samaras’ visit is a sign of the “very close ties” between the two countries, only to add later that each side had lost credibility in the eyes of the other and that trust must be regained.
“Our aim is for Greece to remain in the eurozone, despite all the problems that exist,” Merkel said, noting that the euro is more than a currency, that it is the embodiment of European unification.
The chancellor indicated that she had discussed the Greek programme in some detail with Samaras, and that she expects a strict timetable with “specific results at each step”.
Merkel stressed privatisation, a balanced budget, and structural peform as the three areas in which palpable results are expected.
It is perhaps no coincidence that privatisation was mentioned first, as there will likely be interest – in Germany, France and internationally - in money-making enterprises and prime real estate that can be acquired at cut rate due to the crisis.
But in a vote of confidence in Samaras’ expressed intentions, Merkel declared, “I am convinced – and I mean it - that the government will do anything possible to transcend the difficulties that Greece is facing.”
Moreover, Merkel noted the tremendous sacrifices that the Greek people have made over the last years, underlining that the weaker classes have borne the brunt of austerity and that those who profited during previous years of prosperity have not done their part.
The remark was a thinly veiled barb against the handling of austerity measures by successive Greek governments, which have done nothing to combat rampant tax evasion among the higher income brackets, opting instead for repeated horizontal wage and pension cuts.
Merkel was frank about the political catch-22 that she faces. On the one hand there is the outcry from Greece about the harsh sacrifices imposed on the people, and on the other there is uproar in Germany over repeated loan packages without apparent results.
Analysts and prominent economists have long argued that the one-sided austerity prescription mandated by Berlin – which explains both the social suffering and the inability to meet targets due to the rapidly deepening recession – must be changed in order to stimulate growth.
But the chancellor did not appear ready to concede mistakes. “The majority in Greece and Germany must see things the same way,” she said. Merkel also maintained that the outlook of the Greek and German press should become more homogeneous.
What the German chancellor did not say is what Samaras most hoped to hear, that she would back a two-year extension of the fiscal adjustment period. Instead, she noted that any decisions on Greece will come only after the troika’s report, expected in late September.
She also gave no indication that there would be money to stimulate development and increase market fluidity, which Samaras fervently called for at the joint press conference.
In Brussels, Monetary and Economic Affairs Commissioner Olli Rehn, answering a question by Greek Eurodeputy Nikos Hountis, said that the request for an extension was premature. The response hinted that the request might be reviewed once the consolidation programme is on track.
For his part, Samaras pledged that his government will pursue reforms on a strict timetable and that he is determined to “bring results”.
“I am certain that the troika report will signal that the new coalition government will deliver,” he said.
“We are eliminating two deficits at once – the country’s budget deficit and the credibility deficit,” he said.
But the prime minister underlined that “a revival of the economy and growth is of crucial importance to meet our obligations soon”.
In that regard, he denounced persistent statements by politicians and the media, in both Germany and Greece, about a return to the drachma. He said that such statements totally undermine efforts to reduce the debt and to privatise, as no businessman will invest under such circumstances.
“We are a proud people. We don’t like living on borrowed money. We want to get back on our feet as soon as possible,” the premier said.
(source, Athens News by George Gilson)