Financial Times
February 22, 2011
Angela Merkel held out the prospect on Tuesday of extending the term of the European Union’s bail-out of the Greek economy as part of a comprehensive package of measures to deal with the eurozone crisis, amid warnings that the country could not avoid a sovereign default.
In meetings with the German chancellor in Berlin, George Papandreou, Greece’s prime minister, appealed for an extension of the bail-out programme for Athens agreed last May and also a reduction of interest rates, as his government struggles to cope with a huge debt burden while implementing drastic budget cuts.
Berlin is the largest individual backer of the Greek bail-out, and also the sternest supporter of tough conditions on the deal.
On Tuesday night, Ms Merkel noted that the support measures for Greece had a limited term of three years, while the bail-out for Ireland was over a seven-year period.
But she insisted that any changes to the Greek programme must be made as part of the package of measures to deal with the eurozone debt crisis due to be decided next month.
“We are now thinking about this. Whether the Greek package is prolonged can only be decided in connection with all the other measures,” she said.
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