Wednesday

1st Jun 2016

Hollande and Merkel in show of unity on Greece

The German and French leaders put on a careful display of unity on Greece on Thursday evening (23 August) in Berlin appearing only briefly before press to urge Athens to continue reforms.

In a choreographed event, Chancellor Angela Merkel and her French counterpart Francois Hollande made short statements and took no questions before heading to dinner to discuss how to answer Greece's request for an easing of its bailout terms.

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"It is important for me that we all stick to our commitments... but I will encourage Greece to continue along its path of reforms," Merkel said.

She reiterated the message that no decision on whether Greece should be allowed extra two years to meet its budget target or whether it will be paid the next tranche of its bailout money will be taken until a formal reform progress report - due next month - has been published.

"We want, I want Greece to stay in the eurozone," said Hollande. "It's up to the Greeks to make the necessary efforts so that we can achieve this goal."

Their message came just ahead of separate meetings with Greek Prime Minister Antonis Samaras who is expected to make the case for allowing Greeks more breathing space, a message he has been leaving in a series of German and French newspapers.

While Samaras' plea is thought to have more resonance in Paris where Hollande has previously expressed sympathy for the amount of austerity measures Greek citizens have put up with, Merkel is in a more politically difficult position.

Patience among her own centre-right party members as well as within the liberal party - the junior coalition partners - towards Greece, which has delayed on implementing reforms, is running low.

Finance minister Wolfgang Schaeuble spelled out the hard stance in an interview with SWR public radio.

"More time is not a solution to the problems. More time would, in case of doubt, mean more money," he said.

However, Paris and Berlin will probably have to come to some sort of agreement on being flexible with Greece, with the country's immediate eurozone membership dependent on it.

Both Merkel and Hollande stressed the need to implement recent promises made by eurozone leaders, particularly during the June EU summit.

But here also there are are potential differences. Hollande emphasized the importance of getting central banking supervision - under the auspices of the European Central Bank - up and running as quickly as possible in the eurozone - a source of controversy for Berlin.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

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