German Chancellor Angela Merkel urged Alexis Tsipras to cooperate with Greece’s bailout auditors, leaving the prime minister to face his country’s creditor institutions without political intervention by the government in Berlin.
Meeting before a European Union summit in Malta on Friday, the two leaders agreed that necessary initiatives should be taken so that a pending bailout review can be completed by the end of February, a Greek official said in an e-mail to reporters. Merkel told Tsipras the priority is for Greece to resolve the standoff with representatives of creditor institutions over fulfilling the terms of its emergency loans, according to another official. Both officials asked not to be named because the meeting was private.
Greek Finance Minister Euclid Tsakalotos said Thursday that about a third of the outstanding issues are subject to political negotiations, amid persistent calls by officials representing the International Monetary Fund, the European Central Bank, the European Commission, and the European Stability Mechanism for additional reforms in Greece’s labor market, energy market and public finances.
Completing the review is a condition for the disbursement of emergency loans from the euro area’s crisis fund, which will allow Greece to meet debt repayments this summer. Uncertainty over whether an agreement will be reached on time has weighed on Greek short-term notes. Yields on 2-year bonds rose 4 basis points to 8.39 percent on Friday.
“Europe can’t keep producing more crises than it can consume and it can’t continue those austerity programs that destroy the people,” Tsipras told reporters after EU leaders met to discuss migration. “Europe can’t continue with less solidarity, less democracy, and with some extra-institutional bodies deciding the future of peoples behind closed doors.”
Tsipras also met with European Commission President Jean-Claude Juncker on the sidelines of the summit in Malta. An official briefed on the talks said the Commission urged Greece to take the final steps needed to complete the bailout review and give assurances to its partners that sound fiscal policies will be sustained over the longer term. The official asked not to be named, as the meeting was private.
Stabilizing Greece is “in the interests of Germany and Europe,” German Finance Ministry spokeswoman Nadine Kalwey told reporters in Berlin on Friday. She emphasized that euro-area finance ministers last week “once again called on Greece to meet its commitments and swiftly create the conditions for a review of IMF participation” in the country’s bailout.