Concessions are possible for Greece so long as Prime MinisterAntonis Samaras shows a willingness to meet the main targets setout in his country's bailout program, a senior lawmaker withChancellor Angela Merkel's party said.

A precedent for program adjustments was made with the firstGreek bailout, when the country secured lower interest rates andlonger maturities on bilateral loans than those originally set,Norbert Barthle, the Christian Democratic Union's budget spokesmanin parliament, said today in a telephone interview.

“Small concessions are feasible provided they are strictly madewithin the framework of the second aid program,” Barthle said. “Forinstance, the interest and maturity on loans could be adjusted, asin the case of the first aid package for Greece.”

Barthle's comments add to signs of an easing in Germany'sresistance to granting Greece more room as it struggles to meet theterms laid down by its international creditors in a fifth year ofrecession. Samaras, whose ruling coalition favors an extension ofits fiscal adjustment program by two years, is due to meet withMerkel in Berlin on Aug. 24, and will travel to Paris the next dayfor talks with President Francois Hollande.

Stocks and the euro gained, with the 17-nation single currencyrising to a six-week high against the yen. It bought $1.242 at12:27 p.m. in Berlin, up 0.6 percent.

Spain's 10-year bond yield fell seven basis points to 6.19percent after sliding to 6.16 percent yesterday, the lowest sinceJuly 2. Italian 10-year yields fell nine basis points to 5.67percent. Equivalent German debt yielded 1.55 percent, up 4 basispoints.

While Germany won't approve more money for Greece, existing aidpayments could be brought forward, Michael Meister, a deputy leaderof Merkel's party, said separately.

“Adjustments are conceivable within the financial framework,”Meister said, reiterating comments reported earlier today in theDie Welt newspaper. “Bringing payments forward is only possible ifthere's plausible proof that it won't create new fiscal gapslater.” If the International Monetary Fund were to go along withsuch an approach, “this would be conceivable,” he said.

Parliament Approval

The German Parliament's Budget Committee would be called upon toapprove any adjustments to Greece's program rather than a votegoing to the full plenary session, Barthle said. That wouldprobably make the concessions easier to pass.

“What's utterly important is the will of the Greeks to fulfilthe terms of financial help,” Barthle said. “The ball is in theGreeks' court.”

Greece's so-called troika of international creditors — the IMF,the European Commission and the European Central Bank — returns toAthens early next month. Luxembourg Prime Minister Jean-ClaudeJuncker visits Athens tomorrow to discuss the country's request foran extension to its fiscal adjustment program.

Greek Finance Minister Yannis Stournaras said late yesterdaythat an 11.5 billion-euro ($14.3 billion) package of spending cutsfor the next two years is still under consideration by thegovernment and will be ready by the time the troika returns.

Stournaras presented a 14 billion-euro package of spending cutsto Samaras, Athens-based newspaper Ta Nea reported today, withoutciting anyone. The package, which includes cuts of between 2percent and 20 percent to pensions and as much as a 35 percentreduction in pay for employees in state-run companies, will befinalised in talks with the country's creditors by Sept. 14, Ta Neasaid.

Barthle's comments on a possible lowering of interest rates onGreek loans were reported earlier today in the Passauer Neue Pressenewspaper.

Bloomberg News

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