What will be on the agenda for talks between Merkel and Tsipras?

Agora Contributor: Jens Bastian

This Monday, the Greek Prime Minister Alexis Tsipras will fly to Berlin to meet the German Chancellor Angela Merkel. Some observers have characterised this face-to-face meeting as Tsipras taking the risk of walking straight into the lion’s den. Others have labelled the reunion a much overdue reconciliation attempt after all the political brinkmanship exercised by various ministers in Athens and Berlin in recent weeks.

For the sake of argument, in what follows we will try to speculate on what might be included in the briefing notes that Tsipras will take with him to Berlin. Moreover, over the weekend various advisors in the chancellery will also have formulated different “lines to take” for Merkel when addressing her Greek counterpart.

The fact that Tsipras is going to Berlin to meet Merkel and not vice versa is a key point of departure. The chancellor phoned him on Monday afternoon and he immediately accepted the invitation. Following his interview in the German weekly Der Spiegel on 7 March, Merkel’s advisors identified a to-do list for their boss concerning the Greek agenda. This roadmap included arranging a meeting between both leaders outside the regular European Union summits in Brussels, where the most recent one took place on Thursday.

It is important to point out that in light of the damage done to bilateral Greek–German relations in the course of recent weeks, the choice of Berlin as the location for the meeting is a reasonable one and Merkel’s initiative is a constructive effort at establishing a direct dialogue with Tsipras.

Just imagine if the meeting were to take place in Athens, with the city centre in lockdown as it was during her last visit almost a year ago in April 2014. It speaks volumes on the state of play of current Greek–German relations that a visit by Merkel to Athens would constitute a logistical and diplomatic nightmare for the SYRIZA-led government coalition.

The urgency of the deliberations in the chancellery cannot be underestimated. Speculation about a massive crisis in the Greek government’s public finances abound. Equally, it appears that almost every eurozone finance minister deems it necessary these days to make more or less unsolicited statements about Grexit scenarios or the newest version of what is now called “Greek accident”.

The key decisions about Greece’s capacity to remain in the eurozone will be made first and foremost in Athens, then in the Berlin chancellery and by equal measure at the newly inaugurated headquarters of the European Central Bank (ECB) in Frankfurt.

One of the key questions Tsipras will need to ask Merkel – and he must tread carefully in its precise formulation – concerns the following: Is Germany prepared to continue committing fiscal transfers to Athens for the foreseeable future, including within the framework of a possible third programme, which would not be called a memorandum and cannot be based on a continuation of austerity measures?

Given her track record in eurozone crisis management in the past five years, Merkel will be expecting this question. But she may be reluctant to deliver a clear-cut commitment. She will have in mind that, according to a recent opinion poll for the German public broadcaster ZDF, a majority of respondents (52 percent) were in favour of Greece leaving the eurozone. She will also be aware that the interpretation of such polling data is currently being fiercely debated within her own Christian Democratic Party (CDU).

A second issue that will feature prominently on Tsipras’ list of speaking points concerns the critical role being played by the ECB as regards the current liquidity constraints of the Greek state and lending facilities being provided to Greek banks through emergency liquidity assistance (ELA). As the Greek government’s coffers are running on empty with no liquid refuelling station in sight, the dialogue between Tsipras and Merkel will try to focus on the identification of short-term alternatives.

To what degree this formidable task can be undertaken by the Greek authorities immediately and with verifiable results will be a question addressed to Tsipras. He should be prepared to submit a convincing answer. Any doubts materialising in his reply would limit Merkel’s flexibility to leverage alternative options of her own. It is after all Merkel who can instruct her finance minister, Wolfgang Schaeuble, to show superior restraint towards Greece in future interviews and initiate a greater willingness to seek flexible working arrangements towards a mutual solution in the euro group of finance ministers.

By contrast, it would be reassuring on Tsipras’s part if he would emphasise that, as a member of the eurozone, Greece will not undertake any loan shortcuts through Russia. His forthcoming visit to Moscow will be closely monitored by the chancellery for any signs of regional reorientation by Greece or attempts at calling into question the existing sanctions regime against President Vladimir Putin.

However this give-and-take scenario between Tsipras and Merkel critically rests on a soft power element that is in high demand between both countries but currently in low supply on the ground in Athens and Berlin: it is the political commodity called trust. Given the urgency within the eurozone and the geopolitical implications, both sides need sustainable, confidence-building commitments.

Tsipras’s visit to Berlin means he's getting involved in the urgent repair work between both governments. Politicians of different ideological provenance are reluctant to involve themselves in such messy jobs. Instead, they look for cheap returns by continuing to add fuel to the fire of confrontation and polarisation.

By contrast, statesmen and stateswomen worth their salt approach the challenge differently. They understand that such opportunities, like the encounter this coming Monday in Berlin between Merkel and Tsipras, are the essence of exercising true political leadership. Grasping this opportunity is in the mutual interest of both countries and their citizens. Business as usual is not an option. The incentives and risks are considerable. But if this opportunity is wasted, all bets are off.

*Jens Bastian is an independent economic consultant and investment analyst for southeast Europe. From 2011 to 2013 he was a member of the European Commission Task Force for Greece in Athens. He is a regular contributor to The Agora section of Macropolis. Follow Jens on Twitter: @Jens_Bastian

This article was published in last week's electronic newsletter, which subscribers can receive via e-mail or mobile app. The apps can be downloaded for free at the App Store and Google Play.

2 Comment(s)

  • Posted by: H.Trickler

    Why has my previous comment disappeared????

    >"But if this opportunity is wasted, all bets are off."

    Now, Mr. Bastian - How are the current quotas in your betting centre?

  • Posted by: Dean Plassaras

    Nonsense on the agenda. There is nothing to talk about.

Please Comment

will not be displayed
up to 2000 characters