BERLIN — Chancellor Angela Merkel of Germany kept up the pressure on Greece on Monday, insisting on tougher austerity measures over three years in exchange for approval of an international bailout.
Finance Minister Wolfgang Schäuble of Germany speaks to journalists on Monday in Berlin about financial aid for Greece.
At the same time, the German finance minister, Wolfgang Schäuble, was preparing the ground for quick passage of the bailout in the German Parliament, saying that the stability of the euro was at stake.
Amid the uncertainty, investor confidence in Greek assets sank to a new low Monday, and the euro slipped against the dollar and the pound.
On top of questions about when and how the aid package to Greece of up to €45 billion, or $60 billion, might be delivered, fears are increasing that even with funds in place, Greece will have to restructure its debts, with investors liable to book losses and see the duration of the assets they hold extended.
“Germany wants to help,” Mrs. Merkel said Monday in Berlin. But she insisted that any agreement by Germany to lend its share of the package — €8.3 billion — depended on Greece meeting new conditions set out by the International Monetary Fund and the European Union.
Greece has to accept “hard measures” for the three years specified in the I.M.F. program, Mrs. Merkel said. “When Greece accepts these tough measures not for one year but several, then we have a chance for a stable euro,” she added.
When the idea of a Greek bailout was first floated this year, the assumption had been that an international aid package would buy Greece the time to restructure its economy and pay down its debt — estimated by the European Union at 115 percent of national output.
That confidence has now evaporated as investors focus on long-term obligations, which continue to grow as the cost of refinancing mounts. Investors appear unwilling to wait the months that it would require to see an improvement in Greek budget deficit from the austerity measures being implemented.
Despite Athens officially requesting an aid package from its euro-zone partners and the I.M.F. on Friday, the yield on 10-year Greek bonds rose again Monday — to 9.5 percent. That is yet another record since Greece joined the euro.
“The market is now pricing in a debt rescheduling,” said Robin Marshall, director of investment management at Smith & Williamson in London. “There’s an assumption that €45 billion will be inadequate.” He estimated that Greece would need to refinance up to €60 billion in bonds that are maturing during the next three years in addition to meeting interest repayments.
More broadly, the lack of a plan for Greece to leave the euro area, which might help the situation by allowing it to devalue its currency, and the absence of a formal mechanism for the transfer of funds inside the European Union has laid open the structural weakness of the euro zone.
There is added danger for Germany and France in delaying financial aid: Banks in those two countries retain significant holdings of Greek debt, so any default by Athens could have ripple effects on asset markets elsewhere. Yet domestic political wrangling in Germany ahead of an important regional election next month has also led to doubts about how swiftly the aid will be transferred.
Mrs. Merkel had wanted to postpone any decision about the financial aid package to Greece until after the elections in North Rhine-Westphalia on May 9.
There, as at the federal level, the Conservatives are in coalition with the Free Democrats. But opinion polls show that the coalition will not win enough votes to form the next government, meaning it may need the support of a third party if it wants to remain in power.
Politicians from across the spectrum in Germany have demanded that private lenders participate in the financial assistance package for Greece.
The German public has opposed any major bailout of Greece, and Mrs. Merkel herself has had to accept the idea of a bailout. Still, after adopting a hard line toward Greece, the German government seems reconciled to the idea of lending Greece around €8 billion. That would make it the biggest contributor of the total loan package.
Matthew Saltmarsh reported from Paris.
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