Merkel and Sarkozy united in support for Greece
The German and French leaders say they have found common ground on the Greek economic crisis, and urged Greece to continue with its ambitious reform and austerity program.
The German and French leaders emerged from a meeting in Berlin on Friday with a common message on helping the ailing Greek economy. The pair called for a swift solution to the country's debt crisis, which threatens the stability of the euro single currency.
Chancellor Angela Merkel and President Nicolas Sarkozy said Greece would need a second bailout package to buttress a 110-billion-euro ($157 billion) bailout agreed last year. The issue of a second aid deal, expected to be worth around 80-120 billion euros, has thus far divided eurozone members, with the two leaders saying they had reached a "breakthrough" on the matter and that time was of the essence.
"Germany and France are determined at the upcoming EU summit ... to say that we want a quick solution," Merkel said at a joint news conference in Berlin.
Private sector involvement
The leaders also stated that private sector involvement in a second bailout should be on a voluntary basis and be conducted in coordination with the European Central Bank, the European Commission and the International Monetary Fund.
"I want to stress this: There is no legal basis so far for there being obligatory involvement," Merkel told reporters after the talks.
Coming into the meeting, France had opposed German demands that private lenders such as banks and insurance companies be prepared to accept losses arising from their loans to Greece. Paris, meanwhile, feared private losses would spread to other parts of the eurozone.
Merkel also applauded reform and austerity measures being pursued by the Greek government of Prime Minister George Papandreou which have led to a widespread drop in support for the Socialists. Earlier Friday, Papandreou announced wholesale changes to his cabinet in a bid to address the fall in popularity as he attempted to push through the widely unpopular reform program.
The Socialists' plan involves 28 billion euros worth of new taxes and spending cuts, and a privatization of state assets worth around 50 billion euros. The proposals sparked violent clashes between protesters and riot police in the Greek capital, Athens, earlier this week.
Merkel also reiterated her support for the euro and said Germany's prosperity was dependent on its future stability. Germany and France were determined to defend the common currency, Merkel said, saying "we will do everything to preserve and support the euro."
Later Friday, Merkel and Sarkozy were expected to discuss the battle for leadership of the IMF, with both countries firmly supporting French Finance Minister Christine Lagarde over Mexican Central Bank boss Agustin Carstens.
The talks precede a two-day EU summit called for next Thursday to address Greece's debt woes, which have destabilized the euro single currency and sent jitters through markets around the world.
Author: Darren Mara (Reuters, dpa)
(deutschewelle.de)