Europe signals openness to relaxing Greek timetable, lowering loan rates

BERLIN — As another day passed with Greece no closer to a working government, European officials suggested Wednesday that they had a new tool in their mission to keep the shared euro currency with all its partners: time.

A ticking watch may be the most powerful bargaining chip Europe has against the possibility that anti-bailout voices in Greece will push it off the euro. Every day that ends without new European bailout money for Greece to pay its bills heightens the pressure on its leaders to comply with the austerity measures that come as a condition of the $171 billion rescue package.

Gallery

Greek elections marked by anger over austerity measures: Far-left and far-right parties could benefit from disappointment in the Greek political system, and the results of the May 6 elections promise a more chaotic response to the financial crisis.

Gallery

In Greece, tumult in the government and on the streets: Cutbacks demanded by international lenders have led to a public backlash, with tens of thousands of Greeks flooding into the main squares of cities across the country.

But German officials signaled Wednesday that they may be willing to relax some of the nation’s payment deadlines if a pro-bailout government comes to power, still an uncertain prospect. They may even be willing to consider reducing the interest payments on Greece’s emergency loans, sweetening the deal without abandoning any of the fundamental overhauls hey say Greece needs to get its economy on track.

After Sunday’s elections, in which almost two in three Greek voters picked parties that oppose the bailout deal, even the nation’s pro-bailout leaders said they wanted to renegotiate some of the terms of the rescue package. Germany’s openness for small compromises could be enough to give those politicians a scrap of political cover.

But in Berlin, the main funder of Europe’s rescues and by far the most powerful voice, officials also said they will hold a hard line against changes to the core of the bailout and that it wis Greece’s choice whether it keeps using the euro.

“It’s very important that Greece fulfills all the rules and agreements they have made in the last months. It’s very important for the stability of the euro,” said Norbert Barthle, an ally of German Chancellor Angela Merkel who is the parliamentary budget spokesman for her party, the Christian Democratic Union. “We decided on a second aid program for Greece just a few months ago. We are not so fixed on all the times in this program and all the conditions in this program, but we have to believe in the fundamental aims and we have to believe that Greece itself will do its part.”

Barthle said he was referring to the interest rates that Greece is paying on the long-term emergency loans it receives from the European Union and the International Monetary Fund. Those rates were already reduced once in March, when the bailout deal, Greece’s second, was signed.

“It is up to Greece to decide” whether it stays on the euro, German Finance Minister Wolfgang Schaeuble said at a conference in Brussels, Agence France-Presse reported. “We don’t need to discuss a Plan B.”

Europe has found itself approaching Greece with new leisure after agreeing two months ago to write off most of the country’s privately held debt as part of the bailout and requiring Greece to take measures to open its labor markets and push down salaries to make its economy more competitive. Until the debt write-off, a Greek default would have triggered immediate financial panic, with European banks taking sudden losses on their loans to the troubled Mediterranean country. Now officials say they can afford to wait for payments, noting that the brunt of the pain of bankruptcy would fall on the shoulders of Greece’s own citizens.