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Greek and German leaders meet amid cash shortage fears Greek and German leaders meet amid fears Athens may run out of money
(about 2 months later)
Greek Prime Minister Alexis Tsipras is due to meet German Chancellor Angela Merkel amid mounting concern that Athens is running out of money. 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.
The two countries have been at odds over Greece's efforts to renegotiate the terms of its international bailout. Mrs Merkel said she wanted to see the Greek economy grow.
It follows a pledge from the European Union (EU) to provide €2bn (£1.45bn) to Greece to ease what it called the country's "humanitarian crisis". Mr Tsipras said it was better to talk with each other than about each other.
But Mrs Merkel said on Friday there would be no new money without reforms. 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.
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.European Commission President Jean-Claude Juncker said the €2bn fund would be spent on growth and "social cohesion" in Greece.
"Humanitarian crisis, it has been called, and it is indeed a humanitarian crisis," he said. But Mrs Merkel said on Friday there would be no new money without reforms.
He said the EU would provide Greece with €2bn worth of development funds to boost economic growth, cut youth unemployment and help the poor. Mr Tsipras has pledged to end austerity, but so far, his plans have met resistance from Greece's EU creditors.
Greek Prime Minister Alexis Tsipras welcomed the move, stressing a common need to tackle the humanitarian crisis. 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.
Bailout
EU leaders say Greece is due to produce a fresh reform plan to fend off bankruptcy.
Mr Tsipras has pledged to end austerity - but so far, his plans have met resistance from Greece's EU creditors.
The new crisis comes less than a month after the German parliament approved a four-month extension of rescue finance for Greece while the new government attempts to enact economic reforms.
But relations between Germany and Greece have since deteriorated, with Greece threatening to seize German property as compensation for a Nazi atrocities in World War Two.
Earlier this month, Mr Tsipras also accused Spain and Portugal of conspiring against his country during February's bailout negotiations.
Mr Juncker's announcement came after marathon talks between Mr Tsipras, German Chancellor Angela Merkel and other European leaders in Brussels, on the sidelines of an EU summit.
Mr Tsipras has reportedly already warned Mrs Merkel that Greece will not meet imminent debt payments without new aid.
Spain's Economy Minister, Luis de Guindos, backed Germany's position, saying on Sunday that Greece must implement promised economic reforms.
"There will not be any disbursement before there is a real test that the reforms have been approved and implemented."
According to the Financial Times, Mr Tsipras wrote to Mrs Merkel on 15 March outlining Greece's precarious financial position.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.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".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".
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.
Bridge-building?
It was unclear whether Mr Tsipras would have a list of reforms to present at his meeting in Berlin with Mrs Merkel.
In a newspaper interview on Sunday, he said that the talks would not be "under pressure from negotiations", a suggestion that the meeting may be more about bridge-building than hard bargaining.
But that may not be enough for many in the German government who are reluctant to extend Greece more money unless it comes up with a reform programme.
"I expect [Mr Tsipras] to present this list in his talks with the chancellor on Monday," said Thomas Oppermann, parliamentary leader of Mrs Merkel's Social Democrat coalition partners. "I want to know once and for all if Greece is ready to reform or not."
Yannis Palaiologos, author of The 13th Labour of Hercules, a book about Greece's financial crisis, told the BBC's World Business Report programme that the meeting would be a chance "to rebuild the personal relationship".
Greek proposals so farGreek proposals so far
Greek pledges: Key pointsGreek pledges: Key points