Germany Signals Willingness to Loosen Greek Austerity Measures

German Chancellor Angela Merkel’s government signaled a willingness to loosen Greece’s austerity requirements as long as the next government stands by its obligations under a European Union-led bailout program.

German Foreign Minister Guido Westerwelle said negotiators might consider giving Greece more time to rein in its finances as exit polls in Athens showed pro-bailout New Democracy with a narrow lead and in a position to form a majority coalition.

“I can imagine we could do something in terms of the time frame, because the standstill that has taken place over the past few weeks has done damage,” Westerwelle told broadcaster ZDF in Berlin today. “But one thing must be clear: the treaties must be valid in substance. They can’t be canceled or renegotiated.”

The hint toward a softening of Germany’s position echoes similar comments from Rainer Bruederle, the parliamentary caucus leader of Merkel’s Free Democratic Party coalition partner. At the same time, Westerwelle said renegotiating Greece’s bailout program is out of the question, because European leaders would lose “credibility” with other countries under the bailout fund.

To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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Angela Merkel

Johannes Eisele/AFP/Getty Images

German Chancellor Angela Merkel speaks at the Bundestag, in Berlin, on June 14, 2012.

German Chancellor Angela Merkel speaks at the Bundestag, in Berlin, on June 14, 2012. Photographer: Johannes Eisele/AFP/Getty Images