Greece crisis: Berlin accuses Tsipras of seeking scapegoats outside own ranks / GUARDIAN

Greece crisis: Berlin accuses Tsipras of seeking scapegoats outside own ranks

Criticism of Greek prime minister reinforces view that Germany might refuse to negotiate with Syriza administration on rescue package until after referendum

Ian Traynor Europe editor

Wednesday 1 July 2015 19.39 BST / http://www.theguardian.com/business/2015/jul/01/greece-crisis-berlin-blasts-tsipras-scapegoats-germany

Berlin has delivered a blistering attack on Greece’s beleaguered radical prime minister, Alexis Tsipras, accusing him of lying to his own people and seeking scapegoats for the country’s misery everywhere but in his own ranks.

The German government dismissed desperate attempts by Athens to salvage some form of bailout, prompting Tsipras to hit back, accusing the country’s creditors of trying to “blackmail” Greek voters with dire warnings that a vote against austerity in this weekend’s referendum would be a vote to leave the euro.

Tsipras referred to leaders of other eurozone nations as “extremist conservative forces” and blamed them for the capital controls that have forced the banks to shut down and ration cash.

With relations between Greece and Germany now at their lowest point in the crisis, divisions have also opened up among the main EU powers over what to do about Greece after five years of bailout closed down on Tuesday and the country became the EU’s first to default on loans to the International Monetary Fund.

The trenchant criticism of Tsipras from Berlin reinforced the view that the German government might refuse to negotiate with the leftwing Syriza administration on any new rescue package after Sunday’s referendum in Greece – which Berlin insists is a vote on whether to stay in the euro.

The validity of the vote is now also being questioned. The Council of Europe said one week’s notice fell short of international standards and the wording was unclear, while Greece’s highest court has been asked to cancel the plebiscite on constitutional grounds. A judgement will not be made until Friday.

Syriza’s allies in the German parliament – die Linke, or the Left – accused the chancellor, Angela Merkel, of seeking to topple the Greek prime minister. It is an open secret in Berlin that Merkel, and especially her hawkish finance minister, Wolfgang Schäuble, would be happy to see Tsipras fall as a consequence of Sunday’s vote. At the very least, German government sources say privately, Berlin wants Greece’s flamboyant finance minister, Yanis Varoufakis, replaced.

The rising tension over the Greek debacle surfaced at the very top of the EU on Wednesday when Schäuble rejected the latest Tsipras letter to his creditors accepting most of the austerity terms that last Saturday he had described as “humiliation” and “extortion”, while arguing for much more generous rescue funding over two years and including debt relief.

Schäuble said the Tsipras overture just muddied the waters further, while Merkel flatly ruled out any more negotiations this week until after the Greeks have voted.

“There can be no negotiations on a new aid programme until after the referendum,” said Merkel.

The French president, François Hollande, however, urged a quick fix. “The agreement must come immediately,” he said. “It’s been a while that we’ve been talking about this agreement. It must happen now.”

Tsipras’s erratic tactics in veering from rejectionism to conciliation and back within hours only added to the exasperation in eurozone circles.

Schäuble made plain that he had given up listening to the confusing signals from the Greek government, suggesting it will be very difficult for the two key parties, Athens and Berlin, to move quickly towards defusing a situation losing control. Time is very tight. As well as defaulting on €1.5bn of loans to the IMF on Tuesday, Greece has to redeem European Central Bank bonds worth €3.5bn on 20 July.

“Greece is in a difficult situation, but purely because of the behaviour of the Greek government ... Seeking the blame outside Greece might be helpful in Greece, but it has nothing to do with reality,” said Schäuble. “The Greek government is not doing its people any favours at all if it keeps making completely false statements. Nobody else is to blame for their situation ... It’s all very sad. We’re in a much harder situation than before. It was always difficult. But it has just kept getting more and more difficult since January.” Tsipras assumed office in January.

Tsipras was also criticised by Germany’s vice-chancellor in the Merkel coalition, Sigmar Gabriel. He accused the leftwing Syriza government of allowing the wealthy and the oligarchs to suck the country dry and take “billions” out of the country.

“Who’s liable for this money? Workers in Germany, among others.” He said Europe was doing nothing but throw money at “this corrupt state”.

Valdis Dombrovskis of Latvia, the EU commissioner for the euro, also said it might be possible to strike a deal before the ECB payment deadline on 20 July, only for Schäuble to signal that may not be possible.

In the last 24 hours Tsipras has pirouetted on his tactics to demand debt relief plus a new two-year €29bn baillout from the eurozone’s permanent bailout fund, known as the ESM.

However, this could only be negotiated quickly with maximum goodwill on both sides. The Germans will drive a hard bargain and Merkel may balk at having to take a third Greek bailout to the Bundestag where she could face a revolt.

Merkel and Schäuble strongly emphasised that there was no risk to the rest of the currency bloc from the Greek meltdown.

“Europe is strong,” said Merkel. “Much stronger than five years ago at the start of Europe’s debt crisis which originated in Greece.”

The German finance ministry website on Wednesday issued an FAQs list on Greece blaming the Tsipras government for the breakdown while reassuring Germans about the low likelihood of spillover effects.

“The impact is limited. The eurozone itself is stable and safe. Contagion risks as in 2012 no longer exist.”

“The fact is,” said Schäuble, “that this [Tsipras] government has done nothing to build up a competent administration and it’s been in office for six months.”

Merkel added: “Europe’s future is not at stake. It would be at stake if we forgot who we are and what makes us strong. We are stronger because of the reform policies of recent years, mainly due to Germany’s position.”