German Chancellor Angela Merkel welcomed Greek Prime Minister Alexis Tsipras to Berlin with military honors amid growing speculation that the meeting will ease a deadlock between Greece and its creditors and help unlock aid.
Stocks and bonds rose on Monday ahead of Tsipras’s arrival at the Chancellery, the first official visit by the Syriza leader since his Jan. 25 election on a platform of ending the German-led austerity tied to Greece’s 240 billion-euro ($262 billion) bailouts.
After the anthems of each country were played by the German military band, Merkel led Tsipras up the red carpet and into the Chancellery, where the two leaders are holding talks, followed by a press briefing and then a working dinner.
“Nobody should expect solutions from today’s meeting, from an inaugural visit,” Steffen Seibert, Merkel’s chief spokesman, told reporters in Berlin on Monday. “It’s neither the time nor the format for finding solutions to the Greek problem. That has to happen in the euro group” of finance ministers, he said.
Investors saw the second encounter in five days between Tspiras and Merkel, the leader of the biggest contributor to Greece’s stalled bailout, as constructive compared with the increasingly shrill tone that has characterized exchanges with officials to date.
Greek stocks rose 3 percent in Athens, the biggest gain since Feb. 24, in anticipation of a positive outcome of the meeting. Bonds dropped, with yields on three-year notes rising 36 basis points to 21.73 percent.
The talks take place as Greece’s financial predicament becomes ever more parlous. Tsipras’s government needs to spell out economic measures it plans to undertake as early as this week to free up long-withheld aid payments that will keep the country afloat, with another payment deadline within days.
The government in Athens may submit its latest list of policy measures to the euro area by the end of this week, a Greek official said Monday. The plans will be discussed by technical inspectors from euro-zone finance ministries before being presented to ministers who will then decide whether to sign off on a further aid payment, the official said.
Until that money comes through, Greece is scraping the barrel to pay pensions and salaries. The government has to cover a payment of about 1.5 billion euros ($1.6 billion) in benefits and wages by the end of this week.
Further hemming in the government, European Central Bank President Mario Draghi told European lawmakers Monday that he can’t endorse further support for Greece until he’s persuaded Tsipras is likely to meet the bailout conditions. Draghi urged the premier to engage with representatives from the ECB, the European Commission and the International Monetary Fund who have to decide whether his policy program is up to scratch.
“What is needed is to put in place a process that restores the policy dialogue between the Greek government and the three institutions so that it could yield what we’d call a credible perspective for the successful conclusion of the review under the existing arrangement,” Draghi said.
Tsipras, 40, said in a statement published Sunday in the Greek daily Kathimerini that his first official visit to Berlin will focus on improving bilateral relations.
“Welcome to Germany, Mr Tsipras!” ran the front-page headline on Monday in Bild, Germany’s biggest-selling newspaper. Bild, which has been critical of Greece throughout the sovereign debt crisis that emerged in late 2009, printed its front page in Greek as well as in German.