Greece makes 'superhuman effort,' as PM meets Merkel

27th September 2011, Comments 0 comments

Greece is making a "superhuman effort" to slash debt, Prime Minister George Papandreou said Tuesday as he prepared to meet German Chancellor Angela Merkel for crunch talks on tackling the eurozone crisis.

Papandreou hit out at Greece's critics, saying that to single out Athens for "punishment and scorn" was anything but constructive as he addressed a conference organised by German employer federation BDI ahead of his meeting with Merkel.

"If people feel only punishment and scorn, this crisis will not become an opportunity, it will become a lost cause. And we are determined to make this a success," the Greek leader said.

Merkel, for her part, insisted the crisis was not related to the common currency but rather to the huge debt piles accumulated by euro area members.

"We don't have a euro crisis, but a debt crisis," Merkel told the conference.

Papandreou said pillorying Greece was "frustrating not only at a political level, where a superhuman effort is being made to meet stringent targets in a deepening recession, but frustrating for the Greeks who are making these painful sacrifices and difficult changes."

It is going to take "years to make these major changes," he said, adding: "We are simply asking for respect for the facts."

Papandreou spoke amid increasing speculation that Greece could default, with the next tranche of debt aid due under its May 2010 bailout accord with the EU and IMF hanging fire as officials review the country's finances.

Athens says the aid payment, worth eight billion euros ($11 billion), is essential for it to continue paying its bills.

Greek Finance Minister Evangelos Venizelos insisted Tuesday in Athens that the payment would be made "on time" in October, repeating assurances that the country would not default.

"It will be decided in October (the release of the installment). The disbursement will be decided on time and according to our needs," Venizelos said.

Officials say Greece may announce a number of privatisation deals this week as the debt-hit country comes under increasing pressure from its creditors to meet tough fiscal targets.

"I can guarantee that Greece will live up to all its commitments. I promise you we Greeks will soon fight our way back to growth and prosperity after this period of pain," Papandreou insisted.

The Greek leader said decisions made by European leaders on July 21 to expand the scope and size of the EU's rescue fund were "steps in the right direction" and would give Greece "breathing space" until reforms starting yielding results.

Stock markets rallied sharply on Tuesday on hopes European leaders will finally get a grip on the long-running crisis which is threatening the euro project.

The Merkel and Papandreou meeting at 8:00 pm (1800 GMT) comes two days ahead of a crunch vote in the German parliament to expand the rescue fund -- or European Financial Stability Facility -- for debt-mired Greece and other faltering countries.

Just eight of the 17 eurozone states have so far ratified the new EFSF powers agreed at a July summit.

In Germany, the bill is expected to pass but it is being seen as a key political test for Merkel, with some members of her governing centre-right coalition threatening to defect.

Merkel said it was "of the utmost importance" that the legislation pass.

As a Greek debt default looms and the German economy slows, Europe and the world are looking to Berlin as the eurozone's paymaster to steer the euro to safety.

Europe's failure to tackle the crippling Greek debt crisis is "scaring the world," US President Barack Obama warned on Monday as Germany rejected plans to boost funding for EFSF.

Merkel also hit back at calls for Europe to introduce new economic stimulus packages to boost demand and spend its way out of the crisis.

"This is the wrong idea," Merkel said, adding that one cannot solve a debt crisis by taking on more debt.

She urged her citizens to realise that "Germany is profiting from the euro" while Greece needed to show the financial markets that it was "on the right path."

© 2011 AFP

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