BERLIN -- As Greek banks prepared to reopen after a three-week closure, Chancellor Angela Merkel of Germany on Sunday called for the swift start of negotiations on the Greece bailout package, reiterating her insistence that there will be no reduction in Greek debt but saying that other relief measures can be discussed once Greece has been stabilized.
"There are 11 million people in Greece," Merkel told German public-service broadcaster ARD in an interview, and, while banks are set to reopen today, "there is no normal life," she said. That is why, she said, "we should start negotiating quickly."
Merkel's remarks, made before going on her annual summer vacation, followed weeks of tensions between Greece and Germany over the terms of a bailout to prevent the collapse of Greece's banks and preserve its membership in the eurozone.
While the bailout agreement has split the government of Prime Minister Alexis Tsipras, it also cleared the European Central Bank to inject more funds into the country's financial system.
That will allow banks to reopen today, although capital controls and limits on withdrawals remain in place. The daily cash withdrawal limit of 60 euros will be replaced by a weekly limit of 420 euros, while transfers abroad from Greek accounts remain banned. The Athens Stock Exchange will also stay closed, a spokesman said Sunday in a text message.
Greece's financial strain eased after the central bank approved emergency financing and the European Union completed plans for a bridge loan, a type of short-term loan. The stopgap funding will shore up the Greek economy during talks on a full three-year rescue program worth as much as 86 billion euros. At the current exchange rate, 1 euro equals about $1.08.
The 7 billion euros of bridge financing should leave Greece with enough funds to make a payment due today to the European Central Bank. The country must reimburse the central bank 4.2 billion euros, including interest, as bonds bought during its previous debt crisis mature.
As Greece blew past multiple political and financial deadlines over the past five months, today remained make-or-break. European Union law bans the central bank from financing governments, meaning a default would probably have required it to pull support from Greek lenders, leaving an exit from the euro currency bloc all but assured.
The European Central Bank hasn't said whether Greece is expected to pay its debt by a specific time. A spokesman for the central bank declined to comment.
Greece's government missed a repayment of about 1.5 billion euros to the International Monetary Fund on June 30, though central bank President Mario Draghi said he believes that payment will also now be handed over.
The German government held a hard line in the European talks to secure the bailout, and its finance minister, Wolfgang Schaeuble, shocked many last week by suggesting that Greece might be better off if it left the eurozone, at least temporarily.
Merkel said it would be possible to talk about altering the maturities of Greece's debt or reducing interest paid by Athens, but only after the first successful review of the bailout package, which must now be negotiated. The discussions, which are expected to last four weeks, will include economic targets and changes deemed necessary in return for the three-year rescue program.
Merkel pushed for them to move as quickly as possible, saying that it was important that "the country gets back on both feet quickly."
The chancellor once again ruled out what she called a "classic haircut," by which she meant sharply reducing or forgiving the country's debt.
"A classic haircut of 30, 40 percent of debt cannot happen in a currency union," she said.
She noted that a voluntary haircut among private creditors occurred in 2012 and that maturities had also been extended and interest rates reduced in the past. "And we can now talk about such possibilities again," she said, "once the first successful review of the program to be negotiated has been completed. Then exactly this question will be discussed -- not now, but then."
While the remarks don't go beyond pledges already made by euro-region governments, they signal that the topic could be considered by the end of the year. Ensuring that Greece's debt is sustainable looms as one of the challenges when the talks get underway.
Merkel declined to go into detail on Schaeuble's remarks suggesting that Greece leave the eurozone. He repeated the suggestion again Thursday, a day before the German Parliament gave its crucial approval to talks on a third Greek bailout.
Asked about Schaeuble's suggestion last week that Greece could take a five-year "timeout" from using the shared euro currency to address its economic problems, Merkel said the idea was no longer on the table.
"The option was discussed but we decided on this option, which was quite apparently the right one for all the other" eurozone nations, she said.
Talking to Parliament on Friday, Merkel said the alternative to the new rescue package "would not be a timeout from the euro that would be orderly ... but predictable chaos."
"We have a common result" with Parliament's backing, Merkel said Sunday, "and the finance minister will conduct these negotiations, just like I will."
On Saturday, Schaeuble again caused ructions when the weekly newsmagazine Der Spiegel published an interview with him in which he indicated he would be prepared to resign rather than abandon his convictions. Merkel waved off a question about the remarks, saying only: "Nobody has come to see me and ask for some kind of dismissal. And I have no intention of continuing this discussion."
Asked what would happen if Tsipras did not deliver on promised structural changes, Merkel brushed the question aside: "I'm not going to speculate two days after the vote. We will negotiate now."
After the marathon negotiations in Brussels and in individual members of the 19-nation eurozone, "what counts now is what the result of these discussions was," she said, which was agreement to try to negotiate a new bailout. "That must now be put into action."
Work was underway in Athens a week after an all-night summit in Brussels led Tsipras to agree to measures he once decried. On Friday, he announced plans to rebuild his government, dismissing Cabinet members in his Syriza party who voted against the package in Greek Parliament.
Sixty-four of the 300 lawmakers voted against the package, half from Syriza, including Yanis Varoufakis, who resigned as finance minister earlier this month.
"Tsipras runs the risk of losing control of his party," George Pagoulatos, a professor at the Athens University of Economics and Business, said in emailed comments. "His Cabinet reshuffle represents an effort to cement his coalition. It raises the probability of snap elections in early fall."
Talk of Euro government
Meanwhile on Sunday, French President Francois Hollande said that the 19 countries using the euro need their own government complete with a budget and parliament to cooperate better and overcome the Greek crisis.
"Circumstances are leading us to accelerate," Hollande said in an opinion piece published by the Journal du Dimanche on Sunday. "What threatens us is not too much Europe, but a lack of it."
While the eurozone has a common currency, fiscal and economic policies remain mostly in the hands of each member state. Draghi made a plea last week for deeper cooperation between the euro members after political squabbles over Greece almost led to a rupture in the single currency.
Countries in favor of more integration should move ahead, forming an "avant-garde," Hollande said.
"Europe has let its institutions weaken and the 28 European Union member countries are struggling to agree to move ahead," Hollande said Sunday in a text that was also a homage to his mentor Jacques Delors, a former European Commission President who proposed similar ideas.
Draghi called for the creation of a shared treasury within 10 years in a joint proposal with politicians including European Commission President Jean-Claude Juncker and Eurogroup President Jeroen Dijsselbloem last month.
Information for this article was contributed by Alison Smale of The New York Times; by Patrick Donahue, Eleni Chrepa, Paul Tugwell, Nikos Chrysoloras, Angeline Benoit, Paul Gordon, Carolynn Look, Raine Tiessalo and Anna Edwards of Bloomberg News; and by David Rising of The Associated Press.
A Section on 07/20/2015