–Both Express Confidence That Greece Will Do What’s Needed
–But Juncker Calls For More Measures, Demurs On Extension For Greece

ATHENS (MNI) – Greece’s Prime Minister Antonis Samaras and the head
of the Eurozone finance ministers’ group, Jean-Claude Juncker, sought
Wednesday to stifle growing background noise about the possibility of a
Greek exit from the currency union.

Addressing reporters after a bilateral meeting here early this
evening, Samaras declared that, “those who want a Greek exit from the
euro will fail.” He was backed by Juncker, who declared himself “totally
opposed” to a Greek exit. It would be “dangerous” for Greece to drop out
of the monetary union, and people who are fomenting such speculation
should “close their mouths,” the Eurogroup chief warned.

The two men met here as Samaras prepared to depart on a diplomatic
mission that will take him to Berlin for a meeting with Germany’s
Chancellor Angela Merkel on Friday and to Paris on Saturday for
consultations with French President Francois Hollande.

Samaras said the people of his country are firmly attached to the
euro and that his government is “determined to take all measures needed
to exit the crisis.” He promised that “confidence and credibility will
return” to Greece.

Juncker lauded the Greek citizens, saying they have made “huge
efforts to consolidate public finances.” And he said he was “confident”
the Greek government would do all that was needed.

But he also carried a strict message to Athens, saying that the
country would not get the next tranche of its bailout loan without first
implementing more deficit-cutting measures. And he said that whether
Greece’s Eurozone partners will grant Athens’ request for a two-year
extension — from 2014 to 2016 — to bring its public sector deficit
within the EU’s 3%-of-GDP limit will depend on what the Troika finds in
a report that may not be completed until October.

The demand for even more austerity measures — beyond the E11.5
billion in spending cuts that Athens is already trying to identify —
will present a very difficult political choice to Samaras, who faces a
fractious parliament and could also be confronted by renewed social
unrest. On the other hand, failure to secure the next loan tranche from
its official creditors could force the government to stop paying bills
and wages later this autumn, and that in turn could be a trigger for
Greece to begin printing its own currency.

Juncker, who suggested several months ago that a third bailout
package for Greece might be needed, said this evening that he was not
advocating it at the moment. He also said that there is no need for a
haircut on the Greek debt held by official sector creditors which,
following the private sector debt exchange earlier this year, now hold
the lion’s share of Greece’s debt.

–Athens Bureau, apapmiltiadou@marketnews.com

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