Greek Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras at the Greek Finance Ministry, August 8, 2012.
- Greece’s future within the eurozone is again in the spotlight
- Country’s PM is this week having a series of meetings with European leaders
- Greece’s economy contracted 6.2% in the second quarter of this year
- PM is expected to seek an easing of the bailout conditions
London — Greece’s survival within the eurozone is in the spotlight as the country’s prime minster begins a series of crucial meetings with European leaders.
Antonis Samaras, who heads up the coalition government elected in June, is meeting Eurogroup chair Jean-Claude Juncker Wednesday, before meetings with German Chancellor Angela Merkel and French President Francois Hollande on Friday and Saturday.
Greece, whose economy contracted 6.2% in the second quarter of this year amid severe austerity measures, is seeking an easing of its bailout conditions as it battles to stay within the euro and keep the “European Project” alive.
The country, which took its first bailout more than two years ago, is at the epicenter of the common currency’s problems.
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However, the crisis has spread to far larger economies including Spain, which has youth unemployment over 50%, a banking system requiring tens of billions of euros in financial assistance and borrowing costs which have soared to unsustainable levels.
In an interview with Germany’s Bild newspaper, Samaras said the country needed “room to breathe” rather than extra money, and there are expectations he will push for a two year extension to implement the bailout package.
Germany has been reluctant to make concessions for Greece, and some officials are suggesting a Greek exit is possible.
The European Central Bank executive board member Joerg Asmussen was this week quoted saying an exit from the bloc would be manageable, although it was not preferable.
Samaras and his partners in the coalition government are struggling to find an additional €11.5 billion in spending cuts required by the European Union, International Monetary Fund and ECB, known as the troika.
Elisabeth Afseth, fixed income analyst with Investec, wrote in a note: “It would be refreshingly honest if [Juncker] emerged from meetings holding his head and saying ‘I don’t know how we are going to sort this mess out.’”
She added, “it is more likely that we get supporting comments about ‘great efforts made, difficult economic conditions.’” A warning will probably also be given that more is needed, she wrote.