Greek PM, Merkel to meet on debt crisis: Berlin

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German Chancellor Angela Merkel will hold talks with her Greek counterpart next week, Berlin said on Wednesday, amid tentative signs of progress in overcoming Greece's crippling debt crisis.

"On Tuesday 27th, at 8:00 pm (1800 GMT), the federal chancellor will welcome the Greek Prime Minister George Papandreou to dinner," Merkel's spokesman Steffen Seibert told reporters at a regular government news conference.

"Before this, there will be a short meeting with the press with both making statements," added Seibert.

The main topic of the talks will be "the state of the Greek economy, the drive towards budgetary consolidation and the implementation of the Greek reform programme," added Seibert.

Merkel has repeatedly warned that Greece will not receive the next tranche of aid -- worth eight billion euros ($11 billion) -- unless international observers decide Athens has made progress in tackling its debt mountain.

Greece needs the money to avert default next month which would pose serious dangers for the entire eurozone.

Auditors from the European Union said late on Tuesday that "good progress was made" and that "technical discussions will continue in Athens over the coming days."

There was no correlation between the timing of the meeting and the more positive news coming from Athens, Seibert insisted.

"The German government is not judging individual signals but is waiting for the troika to finish its work," said Seibert, referring to the observers from the International Monetary Fund, the EU and the European Central Bank.

"At the end of the day, what matters is the conclusion the troika in Athens comes to."

Earlier Wednesday, Greece vowed to stay in the eurozone "for ever" and promised stronger budget action amid ongoing speculation that the debt crisis could yet split up the eurozone.

"Greece is and will for ever be a member of the eurozone," Finance Minister Evangelos Venizelos told parliament.

© 2011 AFP

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