Germany is maintaining a hard line with Greece as Athens lobbies for two more years to reduce its deficit to promised levels.
After German Foreign Minister Guido Westerwelle met his Greek counterpart Dimitris Avramopoulos in Berlin he said Greece must press on with the reforms and austerity measures demanded in return for bailout money:.
He told reporters: “We believe that a substantial softening of the agreed reforms is not an option for the German government, but we must wait for the report of the troika – the representatives of the European Union, European Central Bank and International Monetary Fund – before judging anything. Rumours about what the report could contain don’t count, their report itself does.”
He was referring to a weekend report in Germany’s Der Spiegel magazine which cited an interim troika report. It said Greece will likely need 2.5 billion euros in spending cuts over the next two years beyond the 11.5 billion figure to meet international lenders’ demands for cutting its deficit.
After the bilateral discussions, the Greek foreign minister also put his case for extending the time available for Athens to cut its spending.
Dimitris Avramopoulos said: “Austerity measures without stimulus for growth and liquidity on the markets won’t lead to an economic boom, but to less productivity and more people out of work.”
Avramopoulos said his government will present additional spending cuts in several weeks enough to satisfy the troika inspectors.
Worth an additional 11.5 billion euros they include lower pensions, public sector wages, welfare benefits and health expenses. The Greek government is also working on a plan to dismiss up to 40,000 civil servants over the next years.
The problem is Athens has previously promised more than it has delivered.
Greek Prime Minister Antonis Samaras is due to meet later this week with Eurogroup chief Jean-Claude Juncker, German Chancellor Angela Merkel and French President Francois Hollande.
At those meetings Samaras is expected to informally float a long-standing proposal that the austerity measures be spread over four instead of two years to soften their impact on a Greek populace enduring record unemployment and the country’s worst downturn since World War Two.
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