Greek and German leaders meet amid fears Athens may run out of money

  • Published
Alexis Tsipras and Angela Merkel at German Chancellery in Berlin, 23 March 2015Image source, Getty Images
Image caption,
The Greek Prime Minister is on his first official visit to Berlin for talks with the German Chancellor Angela Merkel

Greek Prime Minister Alexis Tsipras and the German Chancellor Angela Merkel have struck conciliatory tones at their Berlin summit, but remained vague on how to prevent Athens from running out of money.

Mrs Merkel said she wanted to see the Greek economy grow.

Mr Tsipras said it was better to talk with each other than about each other.

Both countries have been at odds over Greece's efforts to renegotiate the terms of its international bailout.

"We want Greece to be strong economically, we want Greece to grow and above all we want Greece to to overcome its high unemployment," the German chancellor said at a press conference mid-way through talks, which are due to continue over a working dinner.

She said both countries approached the talks as partners in the EU as well as Nato, facing the same geopolitical challenges. "We both have a vested interest in building cooperation based on trust."

As one of 19 eurozone countries Germany was in no position to decide whether Greece's reform programme was appropriate or not, she said. An institutional framework to assess this was in place, she added.

Image source, Getty Images
Image caption,
Mr Tsipras and Mrs Merkel addressed questions before a second round of talks in the evening

Mr Tsipras noted that it was almost five years since the start of the Greek bailout, which required massive fiscal adjustments in his country.

"It has not been a success story," he said citing a 25% loss in GDP and 60% youth unemployment.

At the scene: Jenny Hill, BBC News, Berlin

Alexis Tsipras looked preoccupied as he arrived - to full military honours - to meet the chancellor of Europe's largest economy and his country's biggest creditor. There was no doubting who held the balance of power during the press conference after his meeting with Angela Merkel.

And after the heated rhetoric that's passed between Athens and Berlin in recent weeks, perhaps it's no wonder his smiles looked a little nervous. The chancellor had told him over the telephone last week, he said, that it's better to talk to - not about - each other.

That was - many here believe - the real purpose of this meeting; to set a new tone in a fraught relationship. Both leaders spoke of their commitment to the euro zone and to discussions held in a 'spirit of trust.'

But Chancellor Merkel looked irritated as Mr Tsipras brought up the subject of war reparations. And, while she maintained that it's not her role to decide what happens to Greece, she did allude to the fact that - for Berlin - the bottom line is unchanged. Germany expects the new Greek government to make the reforms it promised in return for financial aid.

Mr Tsipras stressed the need for dialogue. "It must be our priority to break the stereotypes that have been created over the past few years. Neither are the Greeks lazy, nor are the Germans responsible for all the ills that take place in Greece," he said.

Instead, he added, both countries should work together to fight corruption, which was "continuing to hold Greece back".

Mrs Merkel said that although some issues were going to be discussed in more detail over dinner, there would not be any new commitments.

The summit comes after a pledge from the European Union (EU) to provide €2bn (£1.45bn) to Greece to ease what it called the country's "humanitarian crisis".

European Commission President Jean-Claude Juncker said the €2bn fund would be spent on growth and "social cohesion" in Greece.

But Mrs Merkel said on Friday there would be no new money without reforms.

Image source, AFP
Image caption,
Mr Tsipras was welcomed with military honours before talks at the chancellery

Mr Tsipras has pledged to end austerity, but so far, his plans have met resistance from Greece's EU creditors.

At last week's EU summit, Greece promised to meet creditors' demands to present an economic reform package within days to unlock the cash it needs to avoid leaving the euro.

According to the Financial Times, Mr Tsipras wrote to Mrs Merkel on 15 March outlining Greece's precarious financial position.

In the letter, he wrote that Greece faced a short-term cash-flow crisis and might have to choose between paying pensions and wages and meeting debt obligations.

Mr Tsipras seems clear which option he would choose, writing that to add to Greece's social crisis was "a prospect that I will not countenance".

Greek proposals so far

Image source, AP
  • Combat tax evasion
  • Tackle corruption
  • Commit not to roll back privatisations already introduced, but to review those not yet implemented
  • Introduce collective bargaining, stopping short of raising the minimum wage immediately
  • Tackle Greece's "humanitarian crisis" with housing guarantees and free medical care for the uninsured unemployed, with no overall public spending increase
  • Reform public sector wages to avoid further wage cuts, without increasing overall wage bill
  • Achieve pensions savings by consolidating funds and eliminating incentives for early retirement - not cutting payments
  • Reduce the number of ministries from 16 to 10, cutting special advisers and fringe benefits for officials