BERLIN – Prime Minister Antonis Samaras, feeling the heat at home over ongoing austerity measures and with political rivals nipping at his heels, told German Chancellor Angela Merkel that Greece can take an early exit from its bailout deal with international lenders – including Germany.
Germany has been the biggest contributor to 240 billion euros ($317 billion) in two rescue packages for Greece that began more than four years ago.
But Merkel demanded, and got, harsh austerity measures in return and those ripped Greek society with record unemployment and deep poverty and sent down the popularity of Greece’s coalition of Samaras’ New Democracy Conservatives and its partner the PASOK Socialists.
Samaras told her that Greece will not need a third bailout despite ongoing speculation that grew as the government has failed to finish hundreds of reforms insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).
He said Greece can get out from under its bailout deal sooner than expected and can cover its own funding needs next year, although it’s uncertain how much of a funding gap there might be. Samaras said he would now impose any more austerity measures that might come with additional aid.
Greece in the past months has twice successfully floated sovereign bonds, including a new one at rates lower than it’s paying the Troika, and has reached a primary surplus of more than 1.5 billion euros, giving Samaras the springboard he needs to seek debt relief, although Merkel said that won’t include a so-called “haircut” in which Greece would walk away from much of what it owes, passing the costs on to the taxpayers in the other 17 countries of the Eurozone.
That would make them responsible for generations of wild overspending and runaway patronage in Greece practiced by New Democracy and PASOK, politically unpalatable to Merkel and the Eurozone.
Asked about reports of a “divorce” from the IMF after funding from the EU ends this year, Samaras told reporters: “I don’t accept the term ‘divorce’, even if it’s a velvet one,” Reuters reported.
“We have a co-operation that was never easy, quite the contrary, but that has certainly changed the face of our economy,” he said. “I believe this cooperation will be completed ahead of schedule. If that happens, it would be a success, not a divorce.”
Samaras also said Greece expects talks on further debt relief to begin after the next review by the Troika and and European bank stress tests and that the country would receive an extension of loan maturities and lower interest rates.
“I believe that we can certainly cover our funding needs from next year,” Samaras said. We will see what happens with the next bailout tranches.”
Merkel said that the first positive signs of growth were coming out of Greece and the country was heading in the right direction in the implementation of its bailout program.
“I can only say that I know what a difficult time the country is going through but the first tender shoots of success are visible,” she said at a joint news conference with Samaras.
Samaras also said that a new economic reform plan is coming soon although neither said anything about the tax cuts he reportedly for which he reportedly was going to ask her support for in a bid to prevent the major opposition Coalition of the Radical Left (SYRIZA), which is opposed to austerity, to keep from opening its lead, now at 2.6 percent in the last poll.
Samaras said “Greece can now stand on its own two feet and … we believe we do not require a new support package.” He added that, Greece will soon propose “its own framework to continue reforms in the years to come, beyond the timetable of the (bailout) agreements.”
(Material from the Associated Press was used in this report)