Greek Prime Minister Antonis Samaras is to request a two-year extension to the bail-out memorandum when he meets with German Chancellor Angela Merkel later this month.
As expected Samaras is to request that the latest package of austerity cuts which the government has been rushing to put in place, be spread over four, instead of two, years. The Financial Times reported Athens is planning to seek the additional €20 billion such an extension will require, without resorting to help from other EU countries.
Funds would be raised from an existing IMF loan, the issue of treasury bills, and a postponement of loan repayments on existing Troika approved loans.
Athens News reported an extension of the bail-out memorandum was a key platform of Samaras' election campaign, of which he has already broken a significant number of promises. Ironically Samaras is now keen to implement austerity measures he opposed when in opposition, whilst his two coalition partners are less keen to proceed with further cuts. PASOK leader Evangelos Venizelos showed far greater enthusiasm for austerity when he was the government finance minister bowing to the Troika bidding.
Samaras issued a statement warning "We're all having a difficult time. There will be more hardship", although the hardship did not extend to himself nor interfere with his own holiday plans to enjoy the August 15 break in Messinia.
The patience of Berlin and Brussels with Athens is wearing thin, but former Papademos government adviser George Pagoulatos has warned that continual speculation of a Greek euro exit are hampering recovery. Ekathimerini reported he said in reference to measures already taken to adhere to Troika demands “Greece’s adjustments so far do not justify its image of failure.”
Pagoulatos advised “If Europe were to accept a Greek exit it would raise the risk of full eurozone break-up. The claim to an irreversible monetary union would be shattered. The eurozone would surrender to endless speculation over which country would be next.”