Juncker vents fury over Greek bailout talks at G7 summit

Juncker vents fury over Greek bailout talks at G7 summit

Irate European commission president accuses Greek PM of undermining negotiations, and leaders agree to maintain Russia sanctions

Kate Connolly and Patrick Wintour in Garmisch-Partenkirchen​

Sunday 7 June 2015 20.23 BST / http://www.theguardian.com/world/2015/jun/07/juncker-fury-greek-bailout-talks-g7-summit-russia-sanctions

European Union officials delivered a blistering attack on the Greek government at the G7 summit in Bavaria, and world leaders including Barack Obama sought to avoid a transatlantic split over Ukraine by agreeing to maintain sanctions against Russia.

In a day of secluded talks in the Alpine resort of Schloss Elmau, the biggest drama was provided by a verbal attack on the Greek prime minister, Alexis Tsipras, by the European commission president, Jean-Claude Juncker.

The summit’s host, Angela Merkel, had hoped to solve the Greek bailout crisis before the summit, but instead Juncker felt forced to open proceedings by staging a press conference accusing Tsipras of undermining negotiations over new terms for a bailout and of effectively lying to the Greek parliament.

A visibly angry Juncker said he had told Tsipras during a meeting last Wednesday evening that there was room to negotiate but said the Greeks had been unwilling to take part in in-depth discussions at the meeting.

Instead, he said, Tsipras had promised to send him his proposals the following day, but he was still waiting for them on Sunday.

“Alexis Tsipras promised that by Thursday evening he would present a second proposal. Then he said he would present it on Friday. And then he said he would call on Saturday. But I have never received that proposal, so I hope I will receive it soon. I would like to have that Greek proposal,” he said.

He told reporters he had said to Tsipras that he continued to exclude the idea of a Grexit – “because I don’t want to see it” – but that he could not “pull a rabbit out of a hat”.

Athens has been trying to secure an agreement from Europe and the International Monetary Fund for months for access to more than €7bn in bailout funds. Greece’s creditors have put strict conditions on any deal, which the Greek government has so far refused to accept. But with Greece running out of money and needing to secure funds by the end of June if it to avoid defaulting on its debts, tensions are high.

Juncker, perceived until now as an honest broker in the crisis – taking a softer approach than the Germans, who are viewed in Greece as the architects of austerity – has rarely been seen in such an irate state, sources close to the EU in Garmisch-Partenkirchen said. They warned that Greece might have lost its closest ally in its long fight to secure a rosier deal.

Juncker said he had been disappointed by a speech Tsipras had given to the Athens parliament on Friday. “He was presenting the offer of the three institutions as a leave-or-take offer. That was not the case … He knows perfectly well that is not the case.”

Juncker said Tsipras had failed to mention to parliament his (Juncker’s) willingness to negotiate over Greek pensions.

He added: “I do not have a personal problem with Alexis Tsipras. He was my friend. He is my friend. But frankly, in order to maintain [the friendship], he has to observe some minimum rules.”

Tsipras is due to attend a meeting of European Union and Latin American leaders on Wednesday and Thursday, when Merkel and François Hollande will also be present.

Obama underlined his personal determination to see the euro crisis solved after talks on Sunday morning with Merkel. The prolonged standoff predominantly between Germany and Greece is said to be slowing the return to growth, but Obama is siding with the Germans over the need for the Greek government to do more to co-operate.

In return, the White House won German support to maintain sanctions against Russia over Ukraine. It issued a statement saying: “The duration of sanctions should be clearly linked to Russia’s full implementation of the Minsk agreements and respect for Ukraine’s sovereignty.”

Germany, Britain and the US want an agreement to offer support to any EU member state tempted to withdraw backing for the sanctions on Moscow, which they say are hurting the Russian economy.

Last September’s Minsk accord involving Russia, pro-Russia rebels and the Ukrainian government included the establishment of a 30km (19-mile) buffer zone between the two sides. However, fighting has intensified in recent weeks.

The president of the EU’s council of ministers, Donald Tusk, signalled a toughening of sanctions in a statement at the G7. “If anyone wants to start a debate about changing the sanctions regime, the discussion could only be about strengthening it,” he said.

Antagonism towards Russia, until last year a member of the club of leading industrialised nations, is probably strongest among the G7 in Canada. Stephen Harper, the Canadian prime minister, said: “I don’t think Russia under Vladimir Putin belongs in the G7. Period. Canada would very, very strongly oppose Putin ever sitting around that table again. It would require consensus to bring Russia back and that consensus will just not happen.

“Russia is more often than not trying deliberately to be a strategic rival, to deliberately counter the good things we’re trying to achieve in the world for no other reason than to just counter them.”

He said the “mindset of the guy we are dealing with is that the cold war has never ended and ‘I’ve got to fight to change the ending somehow’”.

Beyond Greece and Ukraine, Merkel wants to see progress on a free trade agreement and climate change, two of the staples of these summits.

On Monday the G7 nations are expected to endorse the goal of November’s UN climate conference of limiting warming to 2C above pre-industrial levels.

Obama has pledged to reduce US emissions by 26-28% from the 2005 baseline within the next 10 years and last year announced an unexpected agreement with China on capping carbon emission.

More difficult than setting the 2C goal is turning promised donations to the Green Climate Fund, a United Nations initiative designed to help poorer countries limit their carbon emissions, into a reality. A 30 April deadline to convert $4.7bn in pledged assistance into specific payment timetables has been missed.

In May Merkel and Hollande committed to a goal to cut global emissions by 60% from 2010 levels within the next 35 years. In both 2008 and 2009 the G7 agreed to a goal of 50%. An endorsement of the more aggressive target this time would be a win for the German chancellor.

In Athens Mega TV reported that relations between Berlin and Washington over Greece had become increasingly frosty – despite the exhortation from Barack Obama at the G7 for a quick solution to the European debt crisis.

The Greek television channel, citing a senior German official, described the US treasury secretary, Jack Lew, imploring his German counterpart Wolfgang Schäuble to “support Greece” only to be told: “Give €50bn euro yourself to save Greece.” Mega’s Berlin-based correspondent told the stationthat the US official then said nothing “because, as is always the case according to German officials when it comes to the issue of money, the Americans never say anything”.

Meanwhile, negotiations between Greece and Berlin are expected to intensify Monday when the Greek finance minister Yanis Varoufakis meets Schäuble in the German capital.

The Greek politician, who will be in Berlin to give a speech, requested the meeting late Friday and is expected to try and smooth over some of the fallout from what Athens’ leftist-led government regards as “incendiary” remarks by Juncker.

“The lenders are trying to rip Greece apart,” said the energy minister Panagiotis Lafazanis adding that while it was not the choice of the governing far left Syriza party to take the country out of the eurozone, neither could it allow “the extinction of Greece” within the eurozone.