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New tone but no new loan - yet

Tuesday, March 24, 2015 - 02:13

Greece says it will present a package of reforms to its euro zone partners by next Monday in hope of unlocking aid. As Sonia Legg reports, its need for help to deal with a cash crunch and avoid default is getting increasingly urgent.

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The Second World War is a bone of contention between Greece and Germany. But the reparation row didn't stop the Greek Prime Minister visiting the Holocaust memorial in Berlin. He says his government's demand for reparations is a moral issue. Some in Berlin seem to agree that Germany is in Greece's debt. (SOUNDBITE) (German) FRANK LEOPOLD SAYING: "There are still some outstanding accounts as far as the things he talked about between 1933-45. And Germany has to pay those. If we hadn't had strong partners after the war, we wouldn't be where we are today." (SOUNDBITE) (German) DIETER DEWES SAYING: "Give assistance? Why not? But it has to be a give and take. It can't be that one is always taking but never gives anything. I think there has to be more fairness on both sides." A lot of mutual goodwill has been on display during Alexis Tsipras's visit to Berlin - including calls to set aside recrimination and national stereotypes. Germany's Foreign Minister welcomed the change of tone. (SOUNDBITE) (German) GERMAN FOREIGN MINISTER FRANK-WALTER STEINMEIER SAYING: "We all know that that is not the solution for the financial problems Greece has to overcome. But it is without a doubt a precondition for serious talks over the next couple of days." Greece says it will have a reform package ready by Monday. But it's been talking about it for a while now. JP Morgan's Kerry Craig says the lack of progress has been in the euro zone's favour. SOUNDBITE: Kerry Craig, Global Market Strategist, JP Morgan, saying (English): "The only real progress Greece has made is the troika no longer being the troika. In terms of the pressure on Greece to reform, it is mainly coming from inside Greece itself. They are rapidly running out of funds, the banking system is still being supported by the ECB and the more the country potentially slips back into recession, the more likely they'll actually run out of that primary fiscal surplus so we are more likely to see Greece move towards what the euro zone wants than see the euro zone move to what Greece wants." The reform programme is politically sensitive in Greece. The left-wing government secured power on a pledge to end austerity policies. It's having to compromise in order to secure a much-needed bailout payment. But it's still insisting they'll be no recessionary measures - only structural reforms.