Greece asks for more time on austerity measures, renewing concerns of eurozone exit

Greek Prime Minister Antonis Samaras at the Finance Ministry in Athens, Aug. 8, 2012. ARIS MESSINIS/AFP/GettyImages

(CBS/AP) BERLIN - Greece's prime minister insisted ahead of a closely watched visit to Germany that Athens doesn't want more money from creditors, but made clear in an interview published Wednesday it would like more time to enact reforms and spending cuts.

Antonis Samaras vehemently rejected the suggestion that it might be better for Greece to leave the 17-nation euro and bring back its former currency, the drachma. That, he told Germany's mass-circulation Bild daily, would result in "a catastrophe for Greece" and economic collapse.

Samaras pledged before coming to power to seek a two-year extension to the deadline for implementing unpopular cuts demanded in exchange for two massive international aid packages worth euro240 billion that are keeping Greece afloat.

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But delays in implementing reforms and austerity measures have fueled impatience in Germany — the largest single contributor to the bailouts — and other eurozone countries. German officials and lawmakers have made clear they're in no mood to grant significant concessions, and speculation among market watchers has grown that Greece will have to leave the euro.

Among those foreboding Greece's exit from the eurozone is David Buik, a senior market analyst at BGC Partners in London, who tells CBSNews.com very bluntly: "Greece has to go."

Buik says Greece simply does not have the economic "wherewithal" to reverse its staggering national deficit, and does not belong in the common currency economy with the rest of the European nations.

"Greece is out with the fairies," says Buik. "This is a carbuncle on financial society."

Many economists warn that Greece's withdrawal from the euro would precipitate disaster for the eurozone, and with it the global economy, as banks holding large portions of Greek debt would be hit with a loss in the event of default.

But Buik, who admits he holds the minority opinion on the matter, doesn't buy into the doomsday predictions.

"It is going to cost money," he says, but Greece is such a small player in the overall European economy, and the debt figures are relatively low enough that banks should be positioned to absorb that loss.

"If they haven't made contingency plans to deal with this, then it is my view that they shouldn't be in the market place," he says of the banks.

Greece's eventual withdrawal from the eurozone will not be "the end of the world," says Buik, adding that, "we should much more worried about France."

Europe's second largest economy, says Buik, is the threat looming on the horizon. With debts maturing in about a year, and unions which he says are too powerful crippling economic growth in the country, the potential for a new, much more daunting challenge to eurozone stability is in the cards for 2013.

Luxembourg Prime Minister Jean-Claude Juncker, who chairs the eurozone finance ministers' meetings, is due in Athens on Wednesday. Samaras then heads to Berlin and Paris on Friday and Saturday for talks with German Chancellor Angela Merkel and French President Francois Hollande. Those meetings come ahead of an assessment of Greece's efforts by inspectors from the so-called troika of the International Monetary Fund, European Union and European Central Bank.

"Let me be very clear: we are not asking for extra money," Samaras was quoted as telling Bild. "We stand by our commitments and the implementation of all requirements. But we must encourage growth, because that reduces the financing gaps."

"All we want is a little `air to breathe' to get the economy going and increase state income," Samaras added, without specifying any timeframe. "More time does not automatically mean more money."

Greece's debt stands at more than euro300 billion ($372 billion), and its economy is struggling through a fifth year of recession with unemployment above 23 percent. Still, asked whether Greece needs a second debt writedown following one carried through earlier this year, Samaras replied: "that has never been discussed."

Some German politicians have talked openly in recent weeks about the possibility of Greece leaving the euro, and the vice chancellor, Economy Minister Philipp Roesler, has said that the idea of a Greek exit has "lost its horror."

But Athens insists the country must remain in the euro — something which opinion polls have shown the vast majority of Greeks want.

Asked by Bild whether a return to the drachma would be better, Samaras replied that "the consequences would be a catastrophe for Greece."

"It would mean at least five more years of recession and push unemployment above 40 percent," he was quoted as saying. "A nightmare for Greece: economic collapse, social unrest and an unprecedented crisis of democracy."

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