Greek leader seeks mercy on mission to Germany: we'll do what we have to

George Papandreou pledged in Berlin yesterday that Greece would fulfil its commitments to avoid defaulting on its spiralling debt just 48 hours before an expected tight German parliamentary vote on plans to rescue his country's crippled economy.

The Greek Prime Minister, who was in the German capital for urgent talks with Chancellor Angela Merkel on progress in cutting the Greek budget deficit, attempted to reassure business leaders that his country was sticking to its reform schedule.

Adopting President Barack Obama's favourite slogan "Yes We Can", he told members of Germany's industry federation that Greece would stick by all of its obligations to secure the next slice of bailout funding from its European partners and the IMF. "I can guarantee that Greece will meet all its commitments," he said. "Every Greek wants change, that is why it is so important that our European partners stand alongside us. We are not a poor country but we were a badly led country."

The meeting between the two leaders at the centre of the euro crisis and the speech were clearly designed to reassure the markets, German politicians and an increasingly sceptical German public. German MPs are set to decide tomorrow whether to help Greece by boosting the lending capacity of the eurozone bailout fund, the European Financial Stability Facility (EFSF), from €250bn to €440bn. Germany would be the biggest contributor, with its upper limit amounting to €211bn.

Opinion polls show that between 75 and 80 per cent of Germans are opposed to any more funding for a Greek bailout. A significant number of rebel MPs within Ms Merkel's coalition also reject the idea.

The Merkel government's team of independent economic advisers, its so-called "five wise men", argued in an article in the German edition of the Financial Times that the Greek financial crisis could only be realistically solved by writing off half of the country's debt. Ms Merkel has repeatedly ruled out such an option.

Mr Papandreou's comments came after a German finance ministry announcement that the so-called "troika" of experts from the European Union, the European Central Bank and the International Monetary Fund would return to Greece this week to assess the country's progress in meeting its reform commitments.

The Greek leader's comments were enthusiastically supported by his hostess, Chancellor Merkel, who praised the Greek government's savings and structural reform programmes. "The most important thing now is for Greece to regain trust," she said.

Chancellor Merkel has insisted that she is confident of obtaining a majority from her own coalition of conservatives and liberal Free Democrats tomorrow. However opposition has increased from within her own ranks, particularly among her Free Democrat coalition partners, over the past fortnight and she cannot be absolutely certain of such an outcome.

Her ruling alliance, already beset by infighting, was plunged into further disarray yesterday over reports about plans to radically increase the powers and funding remit of the EFSF beyond levels which will be voted on in the Bundestag tomorrow. The European Commission said yesterday that officials had not started formal talks on the issue. The jittery response of the Free Democrats prompted the finance ministry to issue a statement flatly denying the suggestion.

Ms Merkel needs the support of 311 of her coalition's 330 MPs for the package to pass without help from the opposition. As many as 25 MPs from her coalition have threatened to vote against the measures.