Merkel to face protests on first crisis visit to Greece

* Merkel in Greece for first time since euro crisis beganthere

* Visit shows Germany's change of heart on Greek euro exit * Will make clear Athens must push tough measures By Dina Kyriakidou and Noah Barkin

ATHENS/BERLIN, Oct 7 (Reuters) - German Chancellor AngelaMerkel will tell Greeks she wants to keep their country in theeuro when she visits Athens this week, but she faces a hostilereception from a people worn down by years of austerity andrecession.

Many Greeks blame Merkel, who has publicly chastised themfor much of the past three years, for the nation's plight.Opponents, some of whom have caricatured her as a bullying Nazi,have promised protests on Tuesday during her first visit toGreece since the euro zone crisis erupted there in 2009.

"She does not come to support Greece, which her policieshave brought to the brink. She comes to save the corrupt,disgraced and servile political system," said Alexis Tsipras,who leads the opposition Syriza alliance. "We will give her thewelcome she deserves."

About 6,000 policemen will be deployed in the capital forher 6-hour visit, turning the city centre into a no-go zone forprotest marches planned by labour unions and opposition parties.

"We don't want her here," said Yannis Georgiou, 72, who hasseen his pension cut by one third. "We will take to the streetsagainst austerity and against the government. Maybe Merkel willhear something and see what we're going through."

Merkel's visit is a sign of Germany's support for thecoalition government of Prime Minister Antonis Samaras as itstruggles to agree new budget cuts with international lenders,overcome the objections of reluctant coalition partners and copewith rising public anger.

After toying with the idea of a Greek exit from the eurozone in the first half of 2012, Merkel has come full circle anddecided the risks of the country leaving are too high,especially with a German election looming next year.

The trip is a sign of German solidarity, a message to theGreek leadership and people that Berlin does not want to cutthem loose, and a signal to the members of Merkel's coalitionwho want Greece out that it's not going to happen soon.

At the same time, the trip shows Merkel's trust in Samaras.Aides to the chancellor say they have been positively surprisedby his commitment to reform. One reason for not visiting Greecebefore was frustration with progress under his predecessors,technocrat Lucas Papademos and Socialist George Papandreou.

"In our view Samaras is really trying to get things done,"one German official said, requesting anonymity. "Nobody shouldsee this trip as a sign that all is perfect. But we recognisethings are moving in the right direction."

The Greek government was ecstatic about the news, promisingto treat Merkel with the honours befitting the leader of a greatnation. Greek officials credited Samaras's charm offensive inBerlin in August for Germany's change of heart.

"Samaras showed a real will to change things. He stressedwhat Greece had to do, not what others had to do for Greece," aGreek government official told Reuters on condition ofanonymity.

Merkel is scheduled to meet Samaras, President KarolosPapoulias and representatives of Greek industry.

In a measure of tension between Athens and Berlin earlierthis year, Papoulias accused Merkel's Finance Minister WolfgangSchaeuble of insulting the country by likening Greece to abottomless pit.


Opposition parties, from the radical leftist Syriza to theright-wing Independent Greeks, have planned protests and policeofficials said they were bracing for violence.

For years, banner headlines and cartoons in the press haveportrayed Germany as a bully and protesters burned Nazi effigieson the central Syntagma Square outside parliament.

The tone was more subdued in the newspapers on Sunday. ToProto Thema ran a "HEIL" headline but most others called onMerkel to take a hard look at the suffering of Greek peopleduring her visit.

"Tell Merkel the truth," wrote Nikos Hatzinikolaou in RealNews. "With unemployment at 25 percent and recession at 7percent, for a fifth year, can lenders expect the country tosurvive and pay back its debts?"

The visit gives Merkel a chance to get a first-hand view ofa country that could have a major influence on her ownre-election hopes.

Greece is stuck in tough negotiations with inspectors fromthe "troika" of the International Monetary Fund, EuropeanCommission and European Central Bank over a fresh wave of 11.5billion euros in cuts for the next two years, a condition forgetting an installment of the 130 billion euro bailout which iskeeping the country afloat.

As difficult as these talks are, lenders are now realisingGreece needs more time, money or both. The IMF wants officiallenders such as Germany to take a "haircut" under which thevalue of the Greek debt they hold would be radically reduced.Private bondholders have already swallowed such a hit but EUpartners prefer other measures than to suffer more losses.

In order to avoid going back to parliament to request athird rescue for Athens - a step Merkel allies acknowledge couldbe political suicide for her - Germany will probably have toagree to other concessions to plug a hole in Greece's finances.

These could include giving Samaras an extra two years tomake painful cuts and agreeing to a reduction in the interestrates Athens pays on its EU loans.

Before making concessions that are sure to provoke abacklash at home, Merkel will want to look Samaras in the eyeand make clear to him that she has done all she can - that it isnow up to him. Politically, she will have next to no room togive the Greeks more before next year's German vote.

"She has to lay it on the line and make clear to the Greekgovernment what the options are," Michael Fuchs, a seniorlawmaker in Merkel's Christian Democrats (CDU) told Reuters."Whether the conditions for additional help are met depends noton Germany, but on the Greek government alone."

(Additional reporting by Renee Maltezou and Andreas Rinke;editing by David Stamp)


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