Greek prime minister Antonis Samaras pleaded for more time to cut the nation’s deficit today amid a fresh call on Germany to take a hard line over its €130 billion (£103 billion) bailout.
The talks between Samaras and German chancellor Angela Merkel are seen as crucial in winning Greece an extra two years to reduce its deficit to 3% and implement economic reforms.
Samaras has said Greece’s economy needs “air to breathe” but the head of Merkel’s ruling conservative CDU party, Volker Kauder, appeared to quash talk of concessions.
Kauder said: “It has never been more true than in this situation that time means money, and we cannot make more money available,” he said. “My position is that neither the time nor the content can be renegotiated. Greece must meet its commitments first.”
He added that a Greek exit from the single currency “would be no problem for the euro”. It cast a difficult backdrop for the talks after finance minister Wolfgang Schäuble also warned Greece that “more time... means more money”.
Germany’s finance ministry has admitted it is putting in place contingency plans for an Greek exit and is examining how to prevent contagion.
Barclays Capital analyst Thomas Harjes said: “The official confirmation of a working group putting together a ‘Plan B’ is a clear signal to the Greek government... that there is very little room for renegotiating the current Greek aid programme.”
