EUROZONE CRISIS

Merkel holds off on more flexibility to Athens, for now

The Greek premier's calls for greater flexibility in implementing austerity have fallen flat in Berlin. Chancellor Merkel said the eurozone should wait for a report by creditors making any decisions regarding Greece.

German Chancellor Angela Merkel held talks with Greek Prime Minister Antonis Samaras to Berlin on Friday, emphasizing that she wants "Greece to remain part of the eurozone."

Merkel greets Greek premier

Samaras wants the German chancellor to support his calls for more flexibility in implementing Greece's austerity targets. Berlin has repeatedly called on Athens to uphold its commitment under its international bailout package.

In order to receive a 31.5-billion-euro ($39-billion) tranche of bailout money, Athens is required to cut 11.5 billion euros from its budget to reduce its deficit to less than 3 percent of gross domestic product (GDP) by 2014.

"We don't want more aid ... but we need breathing space," Samaras said during a joint press conference with Merkel after the talks.

He went on to say that the discussion of Greece returning to its old currency - the Drachma - was undermining investor confidence in his country. Samaras added that such speculation "had to come to an end."

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Merkel, for her part, said that the 17 eurozone member states would have to wait until the so-called Troika issues its progress report on Greece before making a decision about revised timelines. The European Union, European Central Bank (ECB) and International Monetary Fund (IMF) are due to publish that report in September.

Franco-German agreement

The German chancellor met on Thursday with French President Francois Hollande in Berlin to discuss the eurozone crisis. Socialist Hollande has been at odds with conservative Merkel over his calls for the collectivization of European debt and allowing the ECB to become a lender of last resort.

But the two leaders managed to strike a united front on the way forward with Greece.

"I want Greece to stay in the eurozone," Holland said after his talks with Merkel on Thursday. "It's up to the Greeks to make the necessary efforts so that we can achieve this goal."

slk/rc (AFP, AP, dpa, Reuters)