Greece PM in crucial meetings as austerity measures bite

Greek Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras at the Greek Finance Ministry, August 8, 2012.

Story highlights

  • Samaras pledges to further address tax evasion in Greece
  • Greece's future within the eurozone is again in the spotlight
  • Greece's economy contracted 6.2% in the second quarter of this year
  • Country's PM is this week having a series of meetings with European leaders

Greek Prime Minister Antonis Samaras says his country, at the epicenter of a financial crisis which has hobbled Europe's common currency, is "turning the page" economically and moving toward stability.

His comments came after a meeting Wednesday with Eurogroup chair Jean-Claude Juncker.

Samaras, who heads the coalition government elected in June, faces further crucial meetings on the topic with German Chancellor Angela Merkel and French President Francois Hollande on Friday and Saturday.

After Wednesday's meeting, Samaras pledged to further address tax evasion, which has been a significant problem for the government's revenue raising. He also said that the three parties that make up the coalition government fully back the package of cuts to be implemented.

Greece, whose economy contracted 6.2% in the second quarter of this year amid severe austerity measures, is seeking an easing of its bailout conditions as it battles to stay within the euro and keep the "European Project" alive.

Quest: What can central banks do?
Quest: What can central banks do?


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The country, which took its first bailout more than two years ago, is at the center of the common currency's problems.

However, the crisis has spread to far larger economies including Spain, which has youth unemployment over 50%, a banking system requiring tens of billions of euros in financial assistance and borrowing costs which have soared to unsustainable levels.

In an interview with Germany's Bild newspaper, Samaras said the country needed "room to breathe" rather than extra money, and there are expectations he will push for a two-year extension to implement the bailout package.

Germany has been reluctant to make concessions for Greece.

After the meeting, Juncker made clear he was opposed to Greece exiting the zone -- comments which come after some European leaders have openly talked about the prospect.

European Central Bank executive board member Joerg Asmussen was this week quoted saying an exit from the bloc would be manageable, although it was not preferable.

Samaras and his partners in the coalition government are struggling to find an additional €11.5 billion in spending cuts required by the European Union, International Monetary Fund and ECB, known as the troika.

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