This is your last chance to keep reform promises, Greece is told

Prime Minister Samaras pleads for breathing space but has little room for manoeuvre

The German Chancellor Angela Merkel yesterday gave a frosty reception to Greece's request for more time to meet the conditions of its sovereign bailout and the Eurogroup president, Jean-Claude Junker, warned the country was on its "last chance" to make good on its reform promises.

The Greek Prime Minister, Antonis Samaras, met Mr Junker in Athens yesterday as he kicked off his diplomatic campaign to secure more "breathing space" for his country to meet its commitments to cut spending, collect more taxes and reform its labour markets. "The ball is in the Greek court – in fact this is the last chance and Greek citizens have to know this," said Mr Junker at a press conference with Mr Samaras.

Mr Samaras, who has led Greece's coalition government since June, will travel to Berlin on Friday to meet Ms Merkel to make the same request for leeway. He hopes to persuade the country's European partners to give it an extra two years to implement its commitments on the grounds that the economy is shrinking more quickly than anyone expected.

"All we want is a bit of 'air to breathe' to get the economy running and to increase state income," he wrote in Germany's Bild newspaper yesterday. Mr Samaras also played down suggestions that Greece would be asking for an additional bailout on top of the €170bn pledged to it by the International Monetary Fund (IMF) and other European governments since May 2010 to avoid bankruptcy.

Yet Ms Merkel warned that no decision would be taken over Greece before September. "We await the report of the Troika," she said, referring to the inspectors from the European Commission, the European Central Bank and the IMF who must judge whether Greece is living up to its promises.

The Troika is due to decide next month whether the next instalment of the bailout package, worth €31.5bn, should be released. Mr Samaras said Greece could survive if the money was delayed by a month, but not much longer. "Theoretically we could bridge the time. But if we don't get the tranche at all Greece is broke," he told the Süddeutsche Zeitung newspaper.

Greece's economy is in its fifth successive year of recession and the unemployment rate has hit 23 per cent. The IMF has forecast that it will contract by 4.7 per cent in 2012. But Athens thinks the slump over the year will be closer to 7 per cent.

Mr Samaras has identified €11.5bn in spending cuts to be delivered between 2013 and 2015 to bring Greece's budget deficit below 3 per cent of GDP. But the Troika is also reported to be on the verge of ordering Athens to identify a further €2bn in cuts to meet its deficit reduction commitments, something which has prompted Mr Samaras to request more time.

Ms Merkel, meanwhile, is under growing domestic pressure not to approve more fiscal leeway. Some members of her own governing coalition have suggested that Greece should be ejected from the single currency, casting doubt over whether she could get assistance for Greece past her own parliament. But some analysts have suggested that Ms Merkel might be able to assist Greece without holding a new vote in the Bundestag. "Within the existing Greek programme envelope, the EFSF [the European bailout fund] could disburse aid instalments earlier to cover additional near-term financing gaps. Furthermore, interest rates on official aid could be cut, or payments postponed," said Christian Schulz of Berenberg Bank.

After meeting Ms Merkel on Friday, Mr Samaras will meet the French president, François Hollande, who is believed to be more sympathetic to Greece's request to be granted more time to meet its commitments.

Now Germany can borrow for nothing

Nervous investors parked their cash with Germany for nothing yesterday, with Berlin attracting reasonable demand at a sale of €4bn of new interest-free two-year bonds. The IOUs came with a zero coupon – meaning Germany pays no interest to the holder – for the second time this year, reflecting a fall in the country's borrowing costs to historic lows as the euro zone debt crisis threatened to engulf Spain and Italy.

While the prospect of the European Central Bank buying Spanish and Italian bonds to curb the two countries' borrowing costs has improved appetite for riskier assets, doubts over the size and timing of any intervention has ensured underlying demand for German debt. Reuters

Suggested Topics
News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Volunteer Trustee opportunities now available at The Society for Experimental Biology

Unpaid Voluntary Position : Reach Volunteering: Volunteer your expertise as Tr...

Early Years Educator

£68 - £73 per day + Competitive rates of pay based on experience: Randstad Edu...

Nursery Nurse

£69 - £73 per day + Competitive London rates of pay: Randstad Education Group:...

Primary KS1 NQTs required in Lambeth

£117 - £157 per day + Competitive London rates: Randstad Education Group: * Pr...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam