France says Greece must show credibility for eurozone

Metalworking craftsman Apostolos Liamiras, 26, poses in his traditional coppersmith’s shop in the Psyrri district of central Athens, on Thursday, Aug. 23, 2012. As Greek Prime Minister Antonis Samaras sets off around Europe to plead for more time to achieve the country’s tough reform targets, austerity-weary Greeks are bracing for new pain but mostly expect to stay in the 17-nation eurozone, come what may. AP

PARIS – French President Francois Hollande said Saturday after talks with the Greek prime minister that crisis-wracked Greece must stay in the eurozone but first needed to prove it is determined to slash its budget deficit.

“Greece is in the eurozone and Greece must stay in the eurozone,” Hollande said at a joint press conference with Antonis Samaras at the Elysee palace.

“But it still has to demonstrate the credibility of its programme and the willingness of its leaders to go the whole way, while doing it in a way that is bearable for the population,” he said.

Samaras was in Paris on the second leg of a trip to try to win more time for his country to meet a deadline to slash billions of euros (dollars) from its budget.

He kicked off the two-day trip on Friday in Berlin with his troubled country’s future in the 17-nation eurozone in the balance as its cash reserves dry up and a new injection of European funds hangs by a thread.

Germany’s Chancellor Angela Merkel offered him a ray of hope at their meeting, stressing she wanted debt-burdened Greece to stay in the eurozone.

Hollande had the same message, and he echoed the German leader by saying that the European Union would wait for a report due in October before deciding on any additional help for the country.

That report on Greece’s progress in implementing the reforms will be drawn up by auditors sent by the European Union, the International Monetary Fund and the European Central Bank.

As part of a 130-billion-euro ($161-billion) bailout package from the EU and the IMF, Greece has committed to sweeping reforms and some 11.5 billion euros of cuts in 2013 and 2014.

But amid reports that the budgetary hole is actually closer to 14 billion euros and a recession now in its fifth year, Samaras is thought to want a two-year extension to make the cuts.

He told reporters in Paris that he was confident that Greece would not be ejected from the eurozone.

“I also think that we can achieve our goals and our commitments, reduce deficits, our debt, complete the structural change we have begun,” he said.

Samaras pledged Friday to stick to all of Greece’s promises to its international creditors and said that he was not asking for more bailout money, but just “breathing space” to implement the spending cuts and reforms.

“I am sure our plan will soon bear fruit. We will hit our targets.”

“We are at the beginning of a new phase in relations between our two countries,” said the Greek prime minister, as ties had become strained between Berlin and Athens as a result of the near three-year eurozone debt crisis.

In the run-up to his trip to Berlin and Paris, Samaras engaged on a media charm offensive, telling papers in Germany and France that a “Grexit”, or Greek exit from the euro, would be catastrophic for Europe.

He told a key opinion-forming paper in Germany, the Sueddeutsche Zeitung: “The Germans will get their money back, that I guarantee personally. And all the others will get their money back too.”

And in French daily Le Monde, he also warned Greece’s exit from the euro would start a devastating domino effect that would hit other members of the common currency.