Merkel and Hollande in extension talks

German Chancellor Angela Merkel and French President Francois Hollande will also meet Greek Prime Minister Antonis Samaras later this week, reports The BBC.

Meeting Mr Samaras yesterday, eurozone chief Jean-Claude Juncker kept the door open for a change to the bailout terms.

The economy of heavily-indebted Greece remains stuck in recession.

The country is currently trying to finalise a package of 11.5bn euros (£9.1bn: $14.4bn) of spending cuts over the next two years.

It is also being asked to put in place economic and structural reforms, including changes to the labour market and a renewed privatisation drive.

The measures are needed to qualify for the next 33.5bn-euro instalment of its second 130bn-euro bailout.

The “troika” of donor bodies monitoring the bailout – the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission – are due in Athens next month to report on whether Greece has made enough progress.

Greece needs the funds to make repayments on its debt burden. A default could result in the country leaving the euro.

Mr Samaras is seeking an extension of up to two years for the painful steps, in order to provide Greece with the growth needed to improve its public finances.

In an interview published on Wednesday, he told Germany’s biggest daily, Bild, that his country needed “a little breathing space” in order to kick-start growth and reduce its deficit.