'Silver lining' to Greek cloud?

Guido Westerwelle said in Athens late on Wednesday that the debt-laden country was making progress, telling Greek people that a continued course of reform "can be the birth of a new economic upswing."

"My impression is that for the first time we are seeing a faint silver lining on the horizon," Westerwelle said after talks with his counterpart Evangelos Venizelos, formerly Greece's finance minister and a key agent in the early stages of the country's economic reforms. "Greece can make it, I am completely convinced of that."

As the largest European Union member in terms of population and economic output, Germany is also the largest single contributor to the emergency loans packages provided to the Greek government. The country is also perceived among many Greeks as the architect of biting austerity measures in a country already struggling with recession and record unemployment. Chancellor Angela Merkel faced major public protests on a visit to Athens last October.

"We Germans know exactly what load you are shouldering and what you are achieving, the depth of the valley you are crossing," Westerwelle told the Greek people. "But I can assure you that if you continue on this reform path, it can be the birth of a new economic upswing."

Clock ticking for latest loan tranche

Representatives of the so-called "troika" made up of the European Commission, the European Central Bank and the International Monetary Fund, are currently analyzing the present state of reforms in Greece. Their approval is considered crucial for the quarterly releases of international loans to the government in Athens. The individual loan tranches must be formally approved by eurozone finance ministers, currently scheduled to convene in Brussels on Monday for their last meeting before the summer break.

German news agency DPA on Wednesday reported that a European Union official had said on condition of anonymity that the review process was currently incomplete and might not be ready in time for the next loan tranche.

"If we don't conclude this review, I don't see any disbursement for the next three months," the Brussels official was quoted as saying, albeit adding that this scenario need not be catastrophic. "I think the Greek authorities have handled challenges that were far greater. Is it a disaster? No. Is it uncomfortable? Yes."

Westerwelle will meet Greek Prime Minister Antonis Samaras on Thursday. Samaras' coalition government holds a wafer-thin majority since the Democratic Left party withdrew from the alliance in June. The junior coalition partner pulled out in protest after the sudden decision to take Greek public television and radio broadcaster ERT off the air. The government has since said a smaller, replacement channel would be launched by the end of August.

msh/lw (AFP, dpa)