The summer break is over for Europe, bringing the eurocrisis back with a vengeance.
After three years of constant struggling and two international bailout packages worth 240 billion euros ($300 billion), the Greek economy is still on the verge of collapse, and a Greek exit from the eurozone seems more possible than ever.
Prime Minister Antonis Samaras has thus started a charm offensive, traveling to Berlin and Paris this week to earn more time to implement reforms. But many observers are skeptical that the Greek coalition government of conservatives and socialists has the power and the will to put the country onto a course of recovery, raising questions as to whether Mr. Samaras will get a very sympathetic audience.
"Greece will stick to its commitments and fulfill its obligations. In fact, this is already happening," Samaras said at a press conference after meeting with Chancellor Merkel today in Berlin. "We're not asking for more money. We're asking for breaths of air in this dive we are taking." He is expected to make similar requests in Paris on Saturday.
But while the German chancellor reassured Samaras that she wants Greece to remain in the eurozone, she only promised at a news conference "that we will not make premature judgments but will await reliable evidence," referring to a report, due in October, by the so-called troika: the creditors from the European Union, the International Monetary Fund (IMF), and the European Central Bank (ECB).
Even before he arrived in their country, Samaras pleaded with the Germans to show patience with Greece. In a number of interviews in German newspapers, both broadsheets and tabloids, he assured readers that Greece would pay back all of its debt. All it needed, Samaras argued, was time to implement the reforms demanded by international creditors as a condition before more bailout money is paid out.
But that argument may not hold much sway.
“Samaras is not going to get the two years extension beyond 2014 that he has talked about in recent days,” says Michael Sauga, economics editor of Der Spiegel magazine. “There is going to be a bit of bargaining, but I don’t think Chancellor Merkel is going to move much.”
Indeed, on Thursday evening, at a crisis meeting with French President François Hollande in Berlin, Chancellor Merkel made clear – without directly referring to Samaras’s calls – that it was up to Greece to serve its creditors.
On this issue, Merkel has the support of the German parliament, where the tone has changed noticeably when help for Greece is debated.
“This is not the time to for the Greek prime minister to come with new promises,” says Martin Lindner, deputy chief whip for the Free Democrats, the junior partner in Merkel’s coalition government. “First we want to hear what actions Athens has taken to change its situation,” he adds, referring to the troika report.
If the troika inspectors diagnose a lack of success in Greece’s attempts to reform its tax collection regime, downsize its public sector workforce, and make its economy more competitive, it could mean the end of international payments.
Brussels does not seem to hold out much hope for a favorable troika report. Already there is talk of a third bailout package Greece might need if it were to be kept in the eurozone. But another rescue package might be a hard sell for the German chancellor – which is why she tries to appear so unyielding, says Ulrike Guerot of the European Council on Foreign Relations in Berlin. “She genuinely wants to avoid a breakup of the eurozone. But she has to calm fears among voters in Germany, where economic growth is slowing, too.”
In the end, Merkel will find a way to help Greece without looking too generous, according to Mrs. Guerot, pointing to the ECB as a potential source of fresh money. It seems unlikely, though, that any decisions will be made in European capitals before the finance ministers have seen the troika report.