Athens News Agency: News in English, 10-03-06

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Positive support for Greek measures from Merkel

[01] Positive support for Greek measures from Merkel

During the joint press conference, Papandreou said Merkel had been very positive in her support of the measures taken by Greece to curb state spending and raise revenues, including public-sector wage cuts and a sharp rise in indirect taxation.

Support for the measures and a decision for joint action by the two countries against speculators were the two main elements of the political support that Greece had sought and received from Germany, he stressed.

A third element was a decision to expand bilateral cooperation in seven sectors, via a joint committee set up by the two countries.

Papandreou said his meeting with Merkel was indicative of the good relations between Greece and Germany, while stressing that the measures taken by his government had been necessary, if painful, in order to emerge from the crisis.

The Greek premier repeated that Greece had not asked for economic assistance, which was confirmed by the German chancellor, and that Greece was not seeking to shunt its responsibilities onto others.

"We are responsible for our country, for solving its problems, but we need political and moral support, which we received from Germany," he stressed.

Both Merkel and Papandreou criticised anti-Greek sentiments that had appeared in sections of the German media and also in the statements of some German politicians, with Merkel stressing that they did not reflect her own views or those of her government.

Among points emphasised by the Greek prime minister was the need to protest the stability of the Eurozone through joint action and a joint approach to problems. According to sources, the Greek premier repeated in talks with Merkel that Greece had the option of seeking a loan from the International Monetary Fund (IMF), though the German Chancellor made no comment on this.

During the press conference, however, she referred several times to the need for stability in the Eurozone and a solution of problems within the euro area.

On the issue of action against speculators, Merkel said the two countries would together raise the issue with the European Commission, while Germany would also raise the issue at the next G-20 meeting and other organisations in which it is a member.

According to the German chancellor, the issue was political and had to be addressed, in spite of any technical difficulties it posed. Governments had to look into ways of controlling speculators, who could not be given a free rein to exploit countries during difficult moments, as they were now doing with Greece, she said.

The market response to the latest 10-year bond issue launched by Greece showed that they had confidence in Greece and that this would be restored even faster if there were structural reforms, she added.

In terms of what Germany could do to help Greece, Merkel said that it could show its solidarity and "not allow feelings but actions" to take the upper hand.

She also strongly supported Greece's presence in the Eurozone, stressing that the European prospect of Greece was the common prospect of all Europe.

She underlined the need to avert the failure of measures taken by Eurozone countries and also that a discussion of how things might have been if Greece were not in the Eurozone was "pointless".

"Participation in the Eurozone benefited Greece, it benefited Germany, it benefited everyone," she said.

Effectively, the result of the meeting was a decision to set up a mixed Greek-Germany government committee to promote bilateral cooperation, especially in the area of 'green' development, and the issue of a joint communique by Papandreou and Merkel.

Given that the issue of a joint communique after a working visit is considered highly unusual for German diplomacy, the decision to promote the decision for bilateral cooperation in this way is seen as a very positive signal of Berlin's confidence and political support for Athens and a strong message to markets.

Some circles also see it as a joint effort to improve the climate in bilateral relations "poisoned" by negative press against Greece in sections of the German media, with several references in the joint communique to the "deep friendship" between the two countries and peoples, which opens with a declaration of the deep friendship linking Greece and Germany on a bilateral level and as partners and allies in NATO and the EU.

This stresses the strong bonds linking the two countries, including the 300,000 Greeks living permanently in German and another 35,000 Germans permanently resident in Greece, as well as the fact that very large numbers of Germans that visit Greece as tourists every year, while one in 10 Greeks is estimated to have lived, studied or worked in Germany for lengthy periods of time.

It announces the intention to "renew and expand" relations of partnership between the two countries and bilateral economic ties, espeically in supporting the competitiveness and innovation in enterprise and promoting sustainable development.

It goes on to list seven areas of potential cooperation to be explored, including environmental policy (water quality and cleaning, desalination using renewable energy sources (RES), waste and sewage treatment), energy and climate policy (RES and energy efficiency, knowhow in marketing RES), civil protection (fire-fighting), dialogue between economic and business bodies in Greece and Germany, cooperation in research, immigration and asylum policy, and cultural exchanges.

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