German Chancellor Angela Merkel plans to make her first visit to Greece next week since the eurozone debt crisis erupted, in a show of support for Athens after it said it would run out of money at the end of next month without fresh international aid.
Greek Prime Minister Antonis Samaras hailed the trip as a positive development at a time when his country is locked in negotiations with eurozone and IMF creditors who are holding back some 31.5 billion euros (US$41 billion) in urgently needed loans.
“The key is liquidity. That is why the next credit tranche is so important for us,” Samaras told the German business daily Handelsblatt.
Asked how long Greece could manage without it, he said: “Until the end of November. Then the coffers are empty.”
A German government spokesman said Merkel would travel to Athens on Tuesday for her first visit since the crisis began in late 2009, when a previous government revealed that Greece had hugely understated its public deficit.
“It is a trip that of course happens to the backdrop of this very difficult situation that Greece is going through right now, the massive adjustment and reform measures that have shaped Greece for the past two years,” Merkel’s spokesman Steffen Seibert told a news conference. “We see that the reform efforts have increased under the Samaras government and we want to support that.”
The visit appears to signal that Europe’s most powerful leader has decided it is essential to keep Greece in the single currency area despite its repeated failure to meet fiscal targets and economic reform commitments under two bailout programs.
“This is symbolically very important. It points clearly to the fact that Merkel is not going to drop Greece, even though things are not going well there,” said Carsten Brzeski, senior European economist at ING bank.
Merkel sought to convey the message of support she wants to bring to the Greek people in comments to a conference of young conservatives in the German city of Rostock.
“Just imagine what is demanded of the people in Greece. That is not easy. And if we are good Europeans than we cannot pretend not to care,” she said. “But our job is to find a way together so Europe will be stronger at the end, and that the generation of the 20-year olds, the 30-year olds, the 15-year olds of today will still have a chance to live in prosperity in Europe. This is our job.”
Merkel has been vilified in some Greek media as dictating devastating austerity to Greece. One newspaper dressed her in a Nazi uniform on its cover.
Greece’s crisis poses potentially the most serious risk to Merkel’s re-election prospects next year, unless a way can be found to keep Athens afloat and avoid another debt restructuring before the German parliamentary election next September.