Greek PM faces Merkel in Berlin as debt fears mount

23rd March 2015, Comments 0 comments

The leaders of Greece and Germany meet Monday in Berlin with the radical-left government in Athens warning it would be impossible to service its crushing debt without fresh EU cash.

After a weeks-long war of words between Europe's paymaster and ailing Athens, Angela Merkel, 60, will welcome 40-year-old Greek Prime Minister Alexis Tsipras on his first official visit to Berlin with military honours at her imposing glass-and-steel chancellery.

Merkel's spokesman Steffen Seibert said they would not negotiate on a settlement for Greece's debt emergency as this was "not a bilateral" issue but one for the eurozone as a whole.

Rather, the meeting is intended to re-establish trust after a corrosive exchange of recriminations that have left Berlin and Athens resentful and wary.

German Foreign Minister Frank-Walter Steinmeier said after talks with his Greek counterpart late Sunday that both countries should focus on their shared goal of keeping Greece in the 19-member eurozone.

"We must not allow the doubtlessly weighty and difficult issues that we in Europe need to resolve together to erode the strong foundation of German-Greek relations," he said after meeting Nikos Kotzias.

But underlining the high stakes, Tsipras warned Merkel in a letter that without EU help, Athens would have to choose between paying off loans and maintaining crucial social spending.

Greek government spokesman Gabriel Sakellaridis confirmed a Financial Times report about the missive dated March 15.

"This is not a threat, it is reality," Sakellaridis told Mega TV, adding that Tsipras had sent a similar letter to French President Francois Hollande and European Commission chief Jean-Claude Juncker.

"The letter said nothing less and nothing more than what we have said since last week... that liquidity is tight and that political initiatives must be taken."

- Turning the screw -

Tsipras has blamed Merkel's insistence on tough austerity over the last five years for his country's "humanitarian crisis" of poverty and mass unemployment.

Merkel, under pressure from her own conservatives at home, says that if Greece wants more bailout loans, the biggest share of which is financed by Germany, it must uphold its commitments on reforms and spending cuts.

Greece's creditors agreed in February to extend its 240-billion euro ($260-billion) bailout by four months in exchange for promises of further reforms.

At an EU summit last week, Greece lobbied Brussels to release vital funds left in the bailout package to help it make payments to creditors in the coming days, and avoid bankruptcy and a possible exit from the euro.

Instead the EU offered two billion euros in unused development funds to Greece after Tsipras vowed to clarify reform pledges demanded by the country's creditors. But that money isn't going into government coffers.

Turning the screw another notch, Spain's conservative economy minister Luis de Guindos told Monday's Financial Times that the fresh aid would not flow to Athens unless it pushes through all of its proposed reforms.

This contradicts a statement by Tsipras that funds would begin to be disbursed as soon as a new list of reforms is presented.

Meanwhile German taxpayers have grown increasingly frustrated with attacks from Greece, where both Merkel and her exacting finance minister Wolfgang Schaeuble have been caricatured as Nazis.

A poll this month said more than half of Germans believe Greece should leave the eurozone.

As tensions have flared, bitter historical memories have resurfaced, with Tsipras's government reviving reparation claims for the Nazi occupation of Greece in World War II.

Kotzias told the German daily Sueddeutsche Zeitung after his talks with Steinmeier that a Greco-German committee of experts could be set up to look into the thorny question.

However Steinmeier's spokesman told reporters Monday that the working group would not focus on war reparations, reiterating that Berlin considered the matter "politically and legally settled".

However Germany's top-selling daily Bild, which has repeatedly whipped up anti-Greek sentiment during the debt crisis, extended an olive branch ahead of the talks.

It splashed the headline "Welcome to Germany, Mr Tsipras!" on its front page in Greek and German and listed 50 reasons to love the Greeks including the fact that 1.6 million Germans went on holiday in their country last year.

Also trying to set a warmer tone for the meeting were dozens of German-Greek couples set to gather in front of the chancellery for a kiss-in ahead of Tsipras's arrival.


© 2015 AFP

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