Greek Prime Minister Antonis Samaras has been lobbying for "breathing space," saying he wants more time, not more money, to implement austerity cuts that are part of the bailout terms.
In comments after meeting Samaras, Merkel left no doubt Germany wants the Greek people to join their government in helping austerity cuts that Samaras fears will be hugely unpopular and dash hopes of securing a hairline growth while honoring commitments on reforms.
The prime minister's plea for more time indicated Samaras still feels the reforms need to be slower and stretched out longer to minimize their political fallout on his government.
Merkel said she was working for Greece to stay in the eurozone but her aides appeared to take a harder line, sending messages that the eurozone was prepared to carry on without Greece.
"What I want is to bring the two realities that have emerged back together into one reality," Merkel said. "Now it's the task of those who have political responsibility in Europe to bridge that gap. I want Greece to say in the eurozone and that's what I'm working for."
She said she had confidence that the Greek government "will do what it takes to solve the problem in Greece." In earlier comments, Merkel acknowledged the eurozone's preferred path of reform for Greece "demands a lot of the Greek people."
Merkel met with Hollande Thursday but analysts said neither leader intends to give Samaras anything beyond assurances until a full review of the Greek debt outlook is completed next month.
A "troika" of the European Commission, the European Central Bank and the International Monetary Fund is to visit Athens before it concludes its findings and publish a report around mid-September. Present plans call for EU finance ministers to meet in Cyprus Sept. 14-15 before the troika publishes its review and reconvene in Luxembourg Oct. 8-9.
However hard Samaras tries to win EU pledges for a further respite in reforms, analysts said, little concrete progress is expected before the Luxembourg meeting which is likely to be followed by a further summit of Merkel and other leaders.
Before being lobbied by Samaras this week, Merkel made clear she still favored a decision on Greek reforms timetable only after the troika's review.
Support for encouraging Greece to leave the eurozone has grown across Europe. However, analysts said, that popular backing for Greece's exit is now more of a headache than headway for Merkel and Hollande, who know only too well that no Greek departure will be neat and tidy. The political fallout of such a "failure" for their own constituencies will also be considerable and dent their own political standing, even if a Greek exit won passing endorsement from the public.
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