MercoPress. South Atlantic News Agency

Greek PM in Berlin will test Germany’s commitment

German politicians suggested Greece should sell islands and the Acropolis

Two political allies of German Chancellor Angela Merkel said Greece should sell off some of its islands to pay off its debts. Greece's Prime Minister, George Papandreou, is due to meet Ms Merkel in Berlin Friday for talks about his country's economic crisis.

Greece has announced strict austerity measures to avoid bankruptcy. Should that fail, Germany is the obvious rescuer, but many Germans do not believe Greece deserves a lifeline.

However Papandreou will arrive having passed a first crucial test: investor demand for a 5 billion Euro ten year bond issue exceeded 16 billion Euro, according to Petros Christodoulou, head of Greece’s debt agency

The government priced the notes at 300 basis points more than the mid-swap rate, or a yield of 6.35%. That compares with 6.09% interest on Greece’s existing benchmark issue due July 2019.

The bond sale marks a test of investor response to Papandreou’s austerity measures. German Chancellor Angela Merkel snubbed his bid for assistance after he announced on Wednesday the third package of deficit cuts this year, saying a meeting in Berlin Friday won’t be “about aid commitments.”

But in Germany two senior politicians have suggested Greece should sell off some of its uninhabited islands. A local newspaper headline reads: “Sell your islands you bankrupt Greeks, and the Acropolis too!”

A real estate website quotes an island price tag of 2 million US dollars, “relatively affordable,” it reads - unless you are Greek. Meanwhile police in Athens have clashed with demonstrators protesting against the Greek government's new plan to tackle its budget crisis.

Officers fired teargas at about 50 people who were upset over the government's plans to freeze the pension and increase several taxes.