Prime minister makes final push for bailout

Prime Minister Lucas Papademos appeared to have a constructive discussion with German Chancellor Angela Merkel and Italian Prime Minister Mario Monti Friday as he attempts to win round European leaders ahead of a Eurogroup meeting on Monday, when finance ministers are due to decide whether to approve a new bailout for Greece.

Papademos took part in a teleconference after Monti suggested that he should be part of the talks with Merkel. Sources said Monti was adamant that eurozone finance ministers should make a final decision on the loan agreement on Monday rather than refer it to a European Union leaders summit at the beginning of March.

Friday’s teleconference was also an opportunity for Merkel to clarify Germany’s position on whether Greece should remain in the eurozone. Comments from Finance Minister Wolfgang Schauble and other German officials this week prompted concern that Berlin was considering allowing Greece to default. Sources said that Merkel insisted this was not the case and that she wants Greek debt restructuring and the new bailout to proceed.

Papademos also spoke Friday to Mark Rutte, the prime minister of the Netherlands, another country that has expressed doubt about whether Greece should receive a new bailout. Sources said that the Greek premier will also attempt to find common ground with Portugal, Spain and Ireland, which would be threatened by a disorderly Greek bankruptcy.

Papademos is due to chair a Cabinet meeting today so ministers can approve the 325 million euros in cuts that Greece needs to make to meet the final condition set by the Eurogroup. The bill could then be submitted to Parliament for voting Saturday or Monday.

Luxembourg Prime Minister Jean-Claude Juncker, who will chair Monday’s Eurogroup meeting, said efforts to slash Greece’s debt from 160 percent of GDP to a target of 120 by 2020 were still “far away” from fruition. “All the discussions I will have... until Sunday night will try to move the figure nearer to the target,” he said.

A report by The Wall Street Journal Friday suggested that the International Monetary Fund would only contribute 13 billion euros out of 130 billion for Greece’s second package. The IMF had contributed 27 percent of Greece’s first package of 109 billion euros. If the IMF takes a smaller role in the second package, eurozone countries would have to make up the difference.

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