BERLIN — Chancellor Angela Merkel insisted Wednesday that Greece can only receive its next vital batch of bailout loans if Greek coalition parties commit in writing to a separate international aid package, ensuring support for painful austerity measures tied to the money.
Greece desperately needs an €8 billion ($10.8 billion) installment from its €110 billion bailout agreed on in May 2010. Without it, Greece will default before Christmas and be unable to pay salaries and pensions.
But, the leader of Europe's biggest economy said she must see written commitments on a new forthcoming aid package from the Greek government and the main coalition parties — the majority socialists and the conservatives — before releasing the funds.
"The Greek question is still unresolved because we do not yet have the preconditions to pay out the next installment," Merkel told Parliament in Berlin.
The conservatives under their leader Antonis Samaras have balked at signing off on the package, insisting their support for the interim government should be enough.
Greece is negotiating to receive a second international bailout, worth €130 billion ($175 billion). It includes provisions for banks and other private holders of Greek bonds to write off 50 percent of their Greek debt holdings, potentially cutting the country's debt by €100 billion.
Samaras has long opposed many aspects of Greece's severe austerity program, including that of new taxes. He has advocated cutting taxes instead of increasing them, saying this would help stimulate growth to pull the country out of recession.Comment on this story
Merkel did not single out Samaras, saying it is "required that we do not only have the signature of Greece's Prime Minister, but also the signatures of the parties supporting the government in Greece," she told lawmakers.
Greek Prime Minister Lucas Papademos' new government was appointed earlier this month after political turmoil led to the resignation of the Socialist prime minister George Papandreou. Papademos is a former central banker and deputy head of the European Central Bank.
Luxembourg's Prime Minister Jean-Claude Juncker, who chairs meetings of the 17-nation eurozone's finance ministers, has said the disbursement of the next installment — the sixth from the initial bailout — would be discussed at the ministers' next meeting on Nov. 29.
European leaders began asking for written commitments amid anger over Papandreou's sudden decision to put Greece's new debt deal to a referendum, which eventually led to his resignation days later.