The Greek government will have been buoyed by notably positive comments from Angela Merkel regarding the countries fiscal consolidation efforts on the eve of her meeting today with Greek Prime Minister Antonis Samaras. If, however, she was adopting the role of ‘good cop’ then the ‘bad cop’ role undeniably went to other European officials, in particular Eurogroup president Jeroen Dijsselbloem.
Significantly Angela Merkel noted in her comments made at a conference yesterday that Greece had made extraordinary progress and had achieved a primary budget surplus saying, “Who would have imagined that this year Greece would post a primary budget surplus, that it would be taking in more revenue than it was spending if one does not include interest payments on the debt?” She added that, “Many in the troika did not believe in Greece, but despite this Greece has achieved it and for that I have a lot of respect.”
Despite this positivity however, speculation in the Greek press that the Germans may be opening the door towards a reduction in the interest rates on loans towards Greece is probably premature. Prior to the chancellor’s comments, her official spokesperson was at pains to stress that the meeting between the two leaders today was “not a negotiation.” Merkel herself also stated that Greece may have made progress but, “not everything has been achieved.”
At the same time, Greece’s troika of lenders (The ECB, IMF and European Commission) is ratcheting up the pressure over the lack of agreement over Greece’s 2014 budget which was submitted to parliament yesterday without troika’s blessing.
Eurogroup president Jeroen Dijsselbloem was especially castigating in comments published Thursday in Ta Nea newspaper, saying that Greece must “urgently meet its commitments” and that, “the evaluation process must be completed soon. Many eurozone finance ministers are beginning to lose their patience.” While he too accepted that Greece had made progress he also spoke of the necessity for Greeks to make “further sacrifices.”
Just how many sacrifices the Greeks already have made is one of the topics that Samaras will likely stress as he briefs Angela Merkel on the political as well as financial situation in Greece. However he is unlikely to gain more from the meeting than further words of support for Greece – which themselves will likely be attached to the message that Greece must continue to make progress along the lines already drawn by the troika.
UPDATE
In remarks made following her meeting with Antonis Samaras, German Chancellor Angela Merkel offered her support over the “difficult decisions,” Greece will have to make. She said that ‘substantial progress’ had been made over the past ten months and fruits of the efforts to stabilize Greece were already being seen, “an example of these being the attainment of a primary budget surplus.”
She also alluded to the Greek government’s dispute with the troika over the 2014 budget saying that while certain issues remained to be resolved “the Greek Prime Minister has assured me that he will do everything he can,” to ensure the country honoured its commitments. She said she knew that Greeks had made many sacrifices but said that for them to see better days, fiscal consolidation must be accompanied by structural reforms.
For his part Antonis Samaras stated that Greece was not seeking further economic assistance beyond that which had already been agreed. He also said that Greece would push ahead with structural reforms stating that there would be no further cuts to wages and pensions.