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January 25, 2022

Merkel, Sarkozy issue Greek bailout warning

Leaders say Greece’s latest rescue package must be finalised in order to ensure country receives next tranche of funds.

BERLIN – German chancellor Angela Merkel has warned that Greece is in danger of losing the next tranche of its financial bailout if rapid progress is not made on its latest rescue package, including the voluntary restructuring of Greek debt held by private creditors, Al Jazeera reported.

Merkel was speaking at a joint news conference on Monday after meeting with Nicolas Sarkozy, the French president, in Berlin to discuss ways to boost growth in eurozone states, which are struggling with rising sovereign debt and unemployment. “We must see progress on the voluntary restructuring of Greek debt,” Merkel said. “From our point of view, the second Greek aid package including this restructuring, must be in place quickly. Otherwise it won’t be possible to pay out the next tranche for Greece.”

The French and German leaders said that their countries were also looking into ways to speed up payments into the eurozone’s permanent bailout scheme (the European Stability Mechanism).

On the proposal for a controversial financial transaction tax, which the United Kingdom has strongly opposed, Merkel said that she could see the possibility of the tax being imposed at the level of the eurozone, which the UK is not a member of. Merkel told the press that she “personally” could imagine “such a tax at the level of the eurozone” only, after France voiced its readiness to go it alone. Sarkozy has suggested France could introduce a financial transaction tax as early as February, though Germany says such a tax must be EU-wide, the BBC said. The UK government says it will only consider introducing such a tax if there is global agreement on it.

Sarkozy, meanwhile, set a deadline of March 1 for a new European accord to enforce tighter budgetary discipline to be agreed to by member countries.

Merkel is due to meet Christine Lagarde, the chief of the International Monetary Fund, on Tuesday in Berlin for “an informal exchange of views” on the crisis, her office said. Merkel said the Greek bailout would also be discussed during that meeting. Sarkozy and Merkel’s first meeting of the new year comes in advance of new Italian Prime Minister Mario Monti’s first official visit to Berlin on Wednesday.

The European Union is continuing to work on implementing tougher budget rules on the weaker nations of the 17-member eurozone, many of whom are dealing with high borrowing costs. The German Chan­cel­lor and her French counterpart are slated to travel to Italy on January 20 ahead of a European summit at the end of the month.

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