Greek PM faces Merkel in Berlin as debt pressure mounts

BERLIN: The leaders of Greece and Germany meet Monday aiming to calm the bitter acrimony raging since a radical-left government took power in Athens vowing to halt an austerity drive spearheaded by Berlin.
After a weeks-long war of words, German Chancellor Angela Merkel, 60, will welcome 40-year-old Greek Prime Minister Alexis Tsipras with military honours at her imposing glass-and-steel chancellery in central Berlin.
Both sides say they will not negotiate on a settlement for Greece’s crushing debt as the country teeters on the brink of insolvency.
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 stakes in the protracted crisis, Tsipras warned Merkel in a letter that Athens will not be able to service its debt without financial help from the EU, his government said.
Greek government spokesman Gabriel Sakellaridis confirmed a Financial Times report saying Tsipras’s letter dated March 15 “warns that his government will be forced to choose between paying off loans, owed primarily to the International Monetary Fund, or continue social spending.”
“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.”
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, for her part, says that if cash-strapped Greece wants more bailout loans, the biggest share of which is financed by Germany, it must accept the bitter pills of spending cuts and reforms.
Talking to the Greek newspaper Kathimerini ahead of the visit, Tsipras said the meeting with Merkel would be an opportunity to talk “without the pressure of any negotiation”.
“It’s important because we will be able to talk about topics which are damaging Europe, and about how to improve relations between our two countries,” he said.
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 EU leaders offered two billion euros in unused EU development funds to Greece after Tsipras vowed to clarify reform pledges demanded by the country’s creditors, but said the money would not go into the government’s coffers.
Other struggling eurozone members were watching Greece closely to ensure it does not get special dispensation while they implement swingeing budget cuts.
Turning the screw another notch, Spain’s conservative economy minister Luis de Guindos told the Financial Times that the fresh aid would not flow to Athens unless it pushes through all of its proposed reforms.