Greek premier will meet with Merkel and Hollande in bailout extension talks
The Greek premier will be meeting with eurozone leaders this week to negotiate an extension to Greece's timetable for making financial reforms and retaining access to bailout funds.
(Page 2 of 2)
But Athens has faltered in the speed and effectiveness with which it has implemented the reforms, fuelling impatience by its creditors, notably Germany, which is the single largest contributor to the bailout.Skip to next paragraph
In Pictures Athens protests
Subscribe Today to the Monitor
"The truth is that Greece ... is suffering from a kind of credibility crisis," Juncker said.
In an appeal to German public opinion, Samaras told the popular mass-circulation Bild that his country needs more time to effectively implement reforms, but that this would not translate into needing more funds.
"Let me be very clear: we are not asking for extra money," Samaras was quoted as telling Bild. "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."
Juncker said that any lengthening of the adjustment period "will depend on the finding of the troika mission."
Hinging on a favorable report from the troika is a massive €31.5 billion ($39.2 billion) bailout installment, without which Greece faces a chaotic default on its vast debts and a possible exit from the euro. A Greek exit would destabilize markets and economies around the world as other vulnerable countries in the eurozone are caught up in investor panic.
Juncker said it's now up to Greece, and Athens must redouble efforts to reduce its budget deficit, reform the public sector, accelerate a stumbling privatization process and open protected professions to competition.
"In fact this is the last chance, and Greek citizens have to know this," he said.
Juncker said Greece's fiscal efforts "have to be credible, they have to be identifiable and they have to be as strong as possible." He added, however, that a demanded new austerity drive aiming to save at least €11.5 billion ($14.3 billion) in 2013 and 2014 must not further aggravate the suffering of ordinary Greeks.
The new measures are expected to include further pension cuts, reductions in broader public sector salaries and the placement of thousands of civil servants in a "labor reserve," where they will draw reduced pay for a few years until retirement.
Samaras' two-month-old coalition government has promised to fully identify these cutbacks within the next couple of weeks, before the next troika inspection.
Geir Moulson in Berlin contributed to this report.