German Chancellor Angela Merkel had reached the view that Greece must not be allowed to leave the euro zone in the autumn and is prepared to grant Athens more flexibility over its bailout payments.

According to der Spiegel magazine on Saturday, Greece has made scant progress on the economic reforms it has promised its international lenders in return for more cash.
But Merkel sees the necessity of avoiding a third aid programme for Athens given the difficulty of getting it passed in the German parliament amid growing bailout fatigue. Merkel said they must find a solution that would involve re-organising the current aid package, for example by increasing upcoming tranches in return for reducing later ones.

The lenders from the EU, ECB and International Monetary Fund will return to Greece in early September to review progress in reforms and decide on potential adjustments to the bailout agreement and it would take a few weeks before their report is ready, the EU executive said late last month.