Conciliatory Notes in Germany on Easing Greece's Burden

The following is an excerpt from an article in 

The New York Times
Thursday, August 23, 2012

Conciliatory Notes in Germany on Easing Greece's Burden

By MELISSA EDDY and JACK EWING

BERLIN — Bild, Germany’s most-read newspaper, has accused Greece of “making our euro kaput” and only a few days ago referred to the country as “a bottomless pit.”

On Wednesday, though, the paper featured a friendly chat with the man in charge of that bottomless pit: Antonis Samaras, the Greek prime minister, who pleaded during an interview for more time to repair his country’s shattered economy. The Bild reporter even inquired how Mr. Samaras was feeling after an eye operation.

Coming from a newspaper known for a keen understanding of what its 2.8 million readers want to hear, the shift in tone could be significant. It coincides with signals from members of Chancellor Angela Merkel’s inner circle this week that, within limits, Germany may no longer be so insistent that Greece stick to existing agreements on its finances.

“All that we want is a little breathing room to get the economy going and increase revenue,” Mr. Samaras told Bild, two days before his first trip to Berlin as head of government. “More time does not automatically mean more money.”

Some top officials in Ms. Merkel’s governing coalition continue to insist that Greece stick to agreements it has made to rein in its government finances. But others, including Guido Westerwelle, the foreign minister, and Michael Meister, the deputy leader of Ms. Merkel’s Christian Democratic party in Parliament, have indicated a willingness to extend the schedule for meeting the terms that international creditors imposed on Greece.

“It is essential that the government in Athens presents a credible plan to implement the measures,” Mr. Meister told the newspaper Handelsblatt on Wednesday. But if the government did, Mr. Meister said, “maximum flexibility” was possible.

The debate about Greece has intensified before a report to be issued next month on the country’s progress in attaining its fiscal goals. Officials have been hinting that parts of the report from the troika of international lenders — the International Monetary Fund, the European Commission and the European Central Bank — may be more positive than expected. But the debate is also pressuring euro zone leaders to acknowledge that the austerity program imposed on Greece by the troika has taken such a toll on living standards that it has become counterproductive.

Some members of Ms. Merkel’s government, including the finance minister, Wolfgang Schäuble, have continued to talk tough on Greece. Volker Kauder, head of the Christian Democrats in Parliament, said repeatedly this week that lawmakers were in no mood to grant concessions to Athens.

“The agreements stand,” Mr. Kauder said in remarks to the Passauer Neue Presse newspaper on Wednesday. “Only when agreements in Europe can be upheld, can we rebuild trust.”

The seemingly conflicting positions taken by key figures in the chancellor’s party may be designed to prepare the German public for a shift in policy. Hard-liners like Mr. Kauder are trying to remind the Greek public that Berlin remains steadfast in its demand for a major overhaul of the economy. The more conciliatory statements are designed to bring Germans around to the idea that granting Greece more time to meet its goals is essential to saving the euro and so, ultimately, is in their best interest.

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