Germany, France Discuss United Front Against Lenience for Greece

Finance Minister Wolfgang Schaeuble of Germany was also unreceptive, saying in the report, “More time is not a solution to the problems.” And Merkel had talked tough on Wednesday as well; she was quoted saying that she was “going into these talks with the awareness that we have to achieve that every partner sticks to his commitments.” Still, Athens has few options and the eurozone may find that it is similarly pressed. The climate in France has changed since Sarkozy’s tenure, as indicated by the words of Prime Minister Jean-Marc Ayrault of France about Hollande’s visit to Merkel to discuss the situation. Ayrault was quoted saying, “It’s not just about balancing budgets, although we must hold to that, it’s also about growth.”

Hollande has already managed to exert his influence beyond Paris and insert measures into the European fiscal pact that are pro-growth rather than pro-cuts. His influence has made hardliners wary. While there is little appetite to incur the costs that would be involved in pushing Greece from the eurozone, stalwart austerity champions in Berlin are warily watching Hollande’s behavior in France toward that country’s deficits as a harbinger of events in the broader eurozone.

A source in the Berlin government said in the report, “If Hollande gives up on his targets because of rising domestic political resistance, we can hardly expect more painful reforms from states like Italy or Spain.”

And while Merkel and Hollande hope to present a united front to Greece, that may not be so easy if Germany does not bend. A Hollande aide said in the report that the French president “has always maintained it is indispensable for Greece to respect its commitments, while at the same time it should be given hope for growth.”

There are signs of cracks in Germany as well, as some government officials seem to acknowledge the difficulty of the current conditions imposed on Greece.

Norbert Barthle, part of Merkel’s center-right governing coalition in the German Parliament, was quoted saying, “With Greece, we cannot change the cornerstones of the aid package or tamper with the principle of conditionality. But I can imagine we could adapt certain things within that framework such as interest rates or maturities on credit, like we already did with the first package.”