World Economy

Greece, Germany Compromising on Aid Terms

Greece, Germany Compromising on Aid TermsGreece, Germany Compromising on Aid Terms

German Chancellor Angela Merkel has said a compromise is possible in the stand-off with Greece over its bailout terms.

But Merkel told reporters as she arrived for a conference with other EU leaders that "Europe's credibility depends on us sticking to rules", BBC reported.

Greece opposes extending its bailout deal, saying it is damaging their economy.

On Wednesday, talks with other eurozone members failed to reach an agreement. However both sides said there was still hope for a deal. Eurogroup President Jeroen Dijsselbloem said the talks had been "constructive".

Greek Prime Minister Alexis Tsipras said as he arrived in Brussels for the summit that he was "very confident" a solution could be found to what he called the EU's "humanitarian crisis".

Merkel suggested there was negotiating room: "Europe always aims to find a compromise and this is the cornerstone of Europe's success."

Merkel said: "Compromises are made when the advantages outweigh the disadvantages and Germany is prepared to compromise. However, we also have to make clear that Europe's credibility depends on us sticking to rules."

Germany has been strongly criticized in Greece, where it is seen as the key backer of the austerity policies the new Greek government has pledged to ease.

High Stakes

Eurozone finance ministers are due to meet again on Monday to try to reach an agreement.

The Greek government and the troika – the EU, International Monetary Fund (IMF) and European Central Bank (ECB) – are to hold talks ahead of the eurozone meeting to try to find common ground, said Simone Boitelle, a spokesperson of the Eurogroup.

The troika has been supervising Greece's massive bailout. But the new left-wing Syriza government was elected promising to renegotiate the bailout and has refused to accept the troika's conditions.

The government has proposed to overhaul 30% of its bailout obligations, replacing them with a 10-point plan of reforms.

It is asking for a "bridge agreement" that will enable it to stay afloat until it can agree a new four-year reform plan with its EU creditors.

However, Greece's creditors in the EU, led by Germany, have insisted that the terms of the bailout cannot be altered.

Greece's debt currently stands at more than €320b ($365b) – about 174% of its economic output (GDP).

The stakes of the talks over Greece's debt are high because of fears that a Greek default could push it out of the euro, triggering turmoil in the EU.

The Greek Defense Minister, Panos Kammenos, previously said Greece might seek funding from Russia, China or the US if it failed to reach a new debt agreement with the eurozone.