President Barack Obama has called on Athens to get "serious" about reforms and to show flexibility with its EU-International Monetary Fund creditors to resolve a standoff that endangers Greek euro zone membership.
At the G7 annual meeting in Bavaria, leaders warned Russia that further "restrictive measures" beyond current sanctions were being formulated in response to its continued actions in eastern Ukraine.
A two-day meeting in Elmau Castle, 100km south of Munich, closed with commitments by leaders to back efforts to hold global temperature increases below 2 degrees compared to pre-industrial levels and to provide additional resources to tackle global pandemics.
But concerns over two countries not even present – Greece and Russia – hung over the event and the closing press conferences yesterday.
Ahead of an EU summit tomorrow, with France and Germany set to talk to Greece, Mr Obama said there was a "sense of urgency" among G7 countries that Greece gets "serious" about reforms to satisfy creditors and encourage economic recovery.
“The Greeks are going to have to follow through and make some tough political choices that will be good for the long term,” he said. “I think everyone wants to make it happen . . . if both sides are showing sufficient flexibility I think we can get this problem resolved.”
The Wall Street Journal reported yesterday that Greece's international creditors last week proposed extending the country's bailout until the end of March 2016 in return for pension cuts, tax increases and other policy steps by Athens, citing unnamed sources.
Concentrated atmosphere
German chancellor
Angela Merkel
, the host of what she called a “very concentrated meeting”, said Greece didn’t dominate talks in Bavaria, though she acknowledged the concern of non-EU G7 members. She said “every day counts” in resolving a dispute over what reforms – if any – Athens is prepared to implement to release €7.2 billion in frozen funding.
As G7 leaders discussed Greece in Bavaria, Greek finance minister Yanis Varoufakis met his German counterpart Wolfgang Schäuble in Berlin for private talks ahead of a speech at a Berlin think tank.
Three days after Greek prime minister Alexis Tsipras rejected reform proposals from the EU and IMF as "absurd", Greek officials indicated they were ready to negotiate a settlement acceptable to all sides before its bailout package expires at month end and Athens faces a debt default.
The unity from Mr Obama and other G7 leaders on Greece was mirrored in the joint front on their approach to Russia.
Dr Merkel said G7 members would “do everything” to move forward the Minsk process agreed to stabilise the situation in eastern Ukraine but were ready to “increase sanctions if the situation makes it necessary”.
Mr Obama said they had discussed additional steps to take if Russia, working through separatists in eastern Ukraine, “doubled down on aggression”.
With an eye on an upcoming EU vote to extend existing sanctions against Russia, he added these talks are still at a technical rather than political level. "Our hope is that we don't have to take additional steps . . . but ultimately this is going to be an issue for Mr Putin, " said Mr Obama. "He has got to make a decision: does he continue to wreck his country's economy and continue Russian isolation in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire?"
Financial tremors
Earlier in the day, the French delegation sparked some excitement after claiming the US leader had expressed concern about the strong dollar in private talks with president François Hollande. The remarks sent tremors through financial markets but Mr Obama insisted he made no such remarks. “I make a practice of not commenting on daily fluctuations of the dollar or any other currency,” he said.
Meanwhile British prime minister David Cameron said he was happy other G7 leaders had taken on board his demand for a more energetic campaign to eradicate the "poison" of institutional corruption circulating through soccer's governing body, Fifa. He said he expected the issue to become as important for G7 leaders as the battle against global tax avoidance. In this initiative he secured the support of the US president, who said it was important soccer was governed with "integrity".
"As the US keeps getting better and better at each World Cup, " he said, with a smile, "we want to make sure that a sport that is gaining popularity is conducted in an upright manner".
