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Greece's prime minister says country needs ‘air to breathe'

Thursday, August 23, 2012

BERLIN -- Greece's prime minister struck a conciliatory tone Wednesday ahead of a closely watched visit to Germany, insisting in interviews with two influential German newspapers that his country doesn't want more money, just more time to deliver on promised economic reforms and government spending cuts.

Antonis Samaras heads to Berlin on Friday for talks with German Chancellor Angela Merkel, whose country is the largest single contributor to Greece's $300 billion bailout packages. German officials and some lawmakers in Merkel's coalition government have made clear they are in no mood to grant significant concessions.

"Let me be very clear: We are not asking for extra money," Samaras told Germany's top-selling Bild newspaper in an interview published Wednesday. "We stand by our commitments and the implementation of all requirements. But we must encourage growth, because that reduces the financing gaps."

"All we want is a little ‘air to breathe' to get the economy going and increase state income," Samaras added, without specifying any timeframe. "More time does not automatically mean more money."

Some German politicians have talked openly in recent weeks about the possibility of Greece leaving the euro, and the vice chancellor, Economy Minister Philipp Roesler, has said that the idea of a Greek exit has "lost its horror."

But Athens insists the country must remain in the 17-nation currency zone -- something which opinion polls have shown the vast majority of Greeks want.

Asked by Bild whether leaving the euro and returning to the drachma would be better, Samaras replied that "the consequences would be a catastrophe for Greece."

"It would mean at least five more years of recession and push unemployment above 40 percent," he was quoted as saying. "A nightmare for Greece: economic collapse, social unrest and an unprecedented crisis of democracy."

Samaras pledged before coming to power that he would seek a two-year extension to the deadline for implementing unpopular cuts demanded in exchange for two massive international aid packages worth 240 billion euros that are keeping Greece afloat.

Greece's debt stands at more than 300 billion euros, and its economy is struggling through a fifth year of recession with unemployment above 23 percent. Still, asked by Bild whether Greece needs a second debt writedown following one carried through earlier this year, Samaras replied: "That has never been discussed."

In a separate interview with the respected Sueddeutsche Zeitung, Samaras said his government would achieve the promised budget cuts of (euro) 11.5 billion over two years -- a prerequisite for Greece to receive the next tranche of aid of (euro) 31 billion. If the payment doesn't occur "Greece will go bust," he said.

After meeting with Merkel on Friday, Samaras travels on to Paris for talks with French President Francois Hollande. Both meetings are seen as key diplomatic way stations ahead of an assessment of Greece's efforts by inspectors from the so-called troika of the International Monetary Fund, European Union and European Central Bank.

Samaras said he hoped European countries would give Greece more financial leeway and allow the country to meet its deficit target of three percent by 2016 -- not 2014 as demanded by the troika. He didn't say whether he would be putting these proposals to Merkel during their meeting but added that "Greece is bleeding, it's really bleeding."

Samaras, who was first elected as a lawmaker in 1977, conceded that his country had to make up for past mistakes -- something German politicians haven't been shy about pointing out.

"Yes, a lot has gone wrong. It is true that many Greeks don't pay taxes. We need to make sure that this stops," he told Sueddeutsche Zeitung in the interview to be published Thursday, provided in advance to The Associated Press.


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