Photo: Wikimedia Commons
Antonis Samaras is having his biggest week since being elected as prime minister of Greece on June 20.Today, Samaras meets with the chair of eurozone finance ministers, Jean-Claude Juncker, ahead of a meeting Friday with German chancellor Angela Merkel and a Saturday meeting with French president Francois Hollande.
Juncker has been critical of relaxing requirements for the Greek bailout package, and just this morning he said that no decision on Greek aid will be made before October. The real purpose for today’s meeting, writes Citi economist Jürgen Michels in a note to clients this morning, is to “to present the savings measures identified by the finance minister as a sign of Greece’s commitment to the Troika programme.”
Voices from around Europe are coming out in support of Samaras as he attempts to renegotiate Greece’s bailouts.
Adam Posen, a monetary policymaker at the Bank of England, had strong words for Germany today. He said in an interview that “it is in Germany’s interest, its commercial interest and economic interest, not just its foreign policy idealistic interests, to really restructure the debt that other countries owe them.”
However, major political figures in Germany strongly disagree with that assessment.
German MP Michael Fuchs, who is the deputy leader of chancellor Merkel’s CDU party, is one of them. In a sign of incredible complacency toward the Greek negotiations, Fuchs said today that “If Greece is going to leave [the euro]…I don’t believe it is going to have a great impact anymore.”
Dutch finance minister Jan Kees de Jager also disagreed with allowing Greece more time to repay loans today, saying, “If it concerns delaying reforms and budget cuts, then it is not a good idea.”
However, others in Germany, including CDU vice chairman Michael Meister, seemed to offer a bit more hope for Greece, saying that as long as no additional bailout funds to Greece were on the table, repayment deadlines could be handled with the “largest possible flexibility,” although it’s unclear exactly what that means.
Citi economist Jürgen Michels points out that actually, since Greece is still running a primary deficit, extending repayment deadlines actually does mean that Greece will need more cash to fund its budget.
Michels writes that this dynamic “suggests that it will be very difficult to close the gap between Greece and the Troika,” and Citi still sees Greece leaving the eurozone in December.
The odds appear to be stacked against Samaras, which means he has his work cut out for him this week.
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