UPDATE 1-Greek PM tells Germany making big efforts to reform

Tue Jan 8, 2013 9:03am EST

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BERLIN, Jan 8 (Reuters) - Greece is making enormous efforts to get its economy back on track despite the pain this involves for its citizens, its prime minister Antonis Samaras said on Tuesday on a visit to Germany, chief champion of austerity in Europe.

German Chancellor Angela Merkel, who has praised the reform drive of Samaras' coalition government, said the whole European Union faces hard work in the coming months to reach agreement on closer economic ties aimed at ending the debt crisis.

"I would like at the outset to make clear that our country is making enormous efforts, accompanied by great sacrifices, to get things back on the right path," Samaras told reporters before his talks with Merkel.

"We are trying to win back credibility, among the peoples of Europe and among the financial markets," he said, adding that Greece had adopted a raft of measures to achieve this goal and to get liquidity flowing to businesses again.

"This and investments are the two big elements which are necessary for our country, a country that is indeed suffering a great deal, above all from the scourge of unemployment, especially among young people."

Greece, which has received tens of billions of euros in emergency loans from its euro zone partners since mid-2010 to stave off bankruptcy, is expected to see its economy shrink for the sixth consecutive year in 2013.

But the Samaras government has won praise, including from Merkel who visited Athens last autumn, for implementing tough austerity measures that Germany and other euro zone countries have demanded in return for their continued financial support.

Reflecting Greece's improved standing in the euro zone, Samaras held talks in Bavaria last month with leaders of the Christian Social Union (CSU), Merkel's conservative coalition partner that has been very critical in the past of Athens' failure to meet tough fiscal targets under its international bailout programme.

Greek business and household bank deposits rose for a third consecutive month in November due to receding fears that Greece may quit the euro zone.

Merkel, who was due to attend an economic conference in Berlin with Samaras later on Tuesday, said the two leaders would discuss on Tuesday ways of boosting economic growth and creating more jobs.

"We will also speak about the European agenda since we must agree by June a strengthening of economic coordination," she said, referring to the EU's mid-year summit.

EU leaders are discussing plans for deeper economic and monetary union including tighter banking supervision.

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