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Greece Will Approve Austerity Measures: Merkel

Friday, 24 Jun 2011 | 9:35 AM ET

German Chancellor Angela Merkel on Friday said she was optimistic that Greece would be able to push through a new package of austerity measures needed in return for further bailout funds.

Aris Messinis | AFP | Getty Images

"The negotiations with the Troika have advanced. I am quite confident. I know the Greek Prime Minister is using all the political clout he has in order to to ascertain a majority," she told reporters at the end of a two-day summit of EU leaders.

She added it would be "highly desirable for the opposition to vote for this package".

Reuters reported that Greece had won the consent of international leaders on Thursday for a five-year austerity plan to avoid a bankruptcy for the country.

"It is better to have as broad-based support as possible," Merkel said, echoing statements made by euro zone finance ministers at their last meeting calling on the country's political parties to accept the need for reform and push ahead with more austerity.

"It's going to be a very difficult road for Greece. Look at the privatization requirements that need a certain amount of time to be realized. The Greeks are very much aware of this," Merkel said.

Greek Prime Minister George Papandreou told reporters EU leaders were aware of the sacrifices the Greek people were being asked to make, but stressed the importance of pushing the measures through in next week's parliamentary vote.

"We are at a crossroads... there is nervousness in the capital market. So far we have managed to avoid default, that is very important," he told reporters at a briefing following the summit.

"Definitely the challenges are huge...but we should and must succeed," he said.

"The support that was given by my fellow European leaders was given because they recognize the sacrifice made by the Greek people. They see we are doing all we can to put our house in order," he added.

Papandreou said the sense of crisis and of national responsibility was "the same sense that will preside over the discussion in the Greek parliament" next week.

Asked whether German banks and insurance companies were prepared to voluntarily maintain their exposure to Greek debt as part of a possible second rescue for Athens, Merkel said she did not want to comment on the current state of the talks, saying there were "no hard numbers yet."

Meanwhile, Reuters quoted French President Sarkozy as saying: "We had many meetings with the banks and the insurance companies. There is no difficulty."

Contact Europe: Economy

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