The Euro crisis

Press TV says "Shape up or ship out, Greece told"

Germany and France turn screw on Greece over austerity plans

Greek PM Antonis Samaras to be told to stick to hardline reforms to stay in eurozone as Berlin rejects plea for more time

The Guardian,

22 August, 2012

Germany and France have ratcheted up the pressure on the Greek government by insisting that Athens stick to its hardline austerity plans in order to remain a member of the eurozone.

Before meetings with the German chancellor, Angela Merkel, in Berlin on Friday and the French president, François Hollande, in Paris on Saturday, the Greek prime minister, Antonis Samaras, was given little hope that the two biggest EU economies were prepared to soften their approach.

Hollande, speaking at a meeting with Merkel in Berlin on Thursday night, said he wanted Greece to remain in the single currency but that the recession-stricken country had to carry out the reforms it had promised.

Wolfgang Schäuble, Germany's finance minister, flatly rejected Samaras's plea that Greece be given two extra years to put its finances back on track.

A decision on whether Athens should be allowed more time will be taken next month by the "troika" – the European Central Bank, the EU and the International Monetary Fund – but Schäuble said it was only six months ago that a second package of help had been provided.

"You cannot just say after half a year, all of that is not enough, because then you will never win the confidence of financial markets," he said on Germany's SWR radio.

"So more time is not a solution for the problems. The question is how we win back confidence."

The existing programme for Greece "must be implemented, and in case of doubt more time means more money", Schäuble continued. "And more money would require a new programme."

The Dutch finance minister, Jan Kees de Jager, urged Germany to take a tough line on Greece. "I say to the German government that it is best for it to stick with its strict position," he said in an interview with the FT Deutschland newspaper. "Delaying correct measures helps nobody, not even the Greeks."

Data released on Thursday showed Germany was now being affected by the crisis in the 17-nation eurozone and by the slowdown in the wider global economy.

A survey by Markit of the business climate pointed to output declining by about 0.5% in the third quarter, putting the eurozone on course for a double-dip recession. The findings for Germany edged down for a seventh successive month to stand at 47 – below the 50 level that marks the cutoff between expansion and contraction.

Jonathan Loynes, chief European economist at Capital Economics, said: "Overall, the survey provided yet another reminder that a chronic lack of economic growth in the eurozone will continue to act as a major impediment to efforts to bring the debt crisis to an end."

Data from China and the US – the two other powerhouses of the global economy – also showed signs of weakness.

The HSBC Flash – or preliminary – China manufacturing PMI (purchasing managers' index) fell to 47.8 in August, its lowest level since November, while the number of Americans applying for first-time jobless benefits rose unexpectedly last week.

Philip Shaw, an economist at Investec, said: "The indicators taken as a whole indicate a material slowdown in the pace of the world economy."