Graeme Wearden 

Alexis Tsipras and Angela Merkel hold press conference after debt talks – as it happened

Greek prime minister has held talks with the German chancellor in Berlin, as pressure grows to meet its creditors’ demands.
  
  

German Chancellor Angela Merkel (L) and Greek Prime Minister Alexis Tsipras (R) shake hands after a joint press conference in the Federal Chancellery in Berlin
German Chancellor Angela Merkel (L) and Greek Prime Minister Alexis Tsipras (R) shake hands after a joint press conference in the Federal Chancellery in Berlin Photograph: Bernd Von Jutrczenka/EPA

Snap summary: Where's the progress?

Angela Merkel is an old hand at this eurozone crisis - and that press conference was an object lesson in sticking to Germany’s position without sounding too unreasonable.

And there were signs of goodwill between the two leaders, at times anyway.

Merkel’s key message, swiftly tweeted by spokesman Steffen Seibert, is that the talks took place in a spirit of trust and cooperation [original translation corrected after kind reader feedback]

The chancellor did express sympathy for Greece - telling reporters:

“We want Greece to be strong economically, we want Greece to grow and above all we want Greece to overcome its high unemployment.”

The press conference was dogged by the issue of war reparations, with Tsipras saying that it remains a moral issue.

The chancellor, as expected, insists that the matter is closed politically and legally -- but did acknowledge the horrors which Greece suffered:

Merkel remains keen to leave responsibility for Greece’s debt talks with the Eurogroup of finance ministers. They must decide whether the Greek government’s reform plan is good enough.

She’s not about to start marking Alexis Tsipras’s homework, in other words - even though she has the ultimate power within the German government.

So what about the Greek leader? Tsipras said that the objective today was to establish common ground. Impossible to say from here whether that’s been achieved.

Today’s meeting may simply be about building a better relationship, after months of point-scoring. As Tsipras put it:

It is better to talk with one another than about one another.”

Tsipras did react well by defending Merkel when the Nazi issue came up -- saying that Spiegel’s front-cover showing Merkel among the Nazis in Athens was “extremely unfair to the chancellor, and to Germany”.

That puts weight behind his argument that Europe must end the stereotypes of lazy Greeks and Nazi Germans.

Merkel heeded that spirit of togetherness when she said:

Although there are 80 million people living in Germany and we are the biggest economy in the European Union, this Europe is built on the principle that each country is equally important - no matter how many residents it has.

But, it’s not clear that any progress has actually been made towards unlocking bailout funds for Greece before it runs out of cash, perhaps in two weeks. Don’t despair, though, the leaders are sitting down to a working dinner now.

We’re unlikely to hear from Merkel and Tsipras again tonight, but I’ll keep this liveblog open in case there are developments....

In the meantime, thanks for reading and for all the comments... GW

Updated

The Greek reaction

Greek politicians were quick to dismiss any sense that real progress had been made at today’s talks (reports Helena Smith from Athens).

Alexis Tsipras’ meeting with Angela Merkel may have been an ice-breaker and put relations between the two leaders on a firmer footing, but the Greek prime minister had failed to extract any promises from the German chancellor, or more importantly, funding to cover the looming credit crunch.

“I hope I am wrong, but I don’t think the meeting went well,” said conservative MP and former health minister Andonis Georgiadis.

“Mrs Merkel, of course, couldn’t say I will give you money as that is the job of creditors but she could have said ‘I am much more optimistic after these talks’ and she didn’t.”

But the Greek media was clearly enthused that the German chancellor said Berlin would not “ignore” the issue of Nazi war reparations [even though she also said it is legally and politically resolved].

Many commentators described the move as a clear break with the past. Under a banner headline, Ta Nea quoted Merkel as saying:

“We want to collaborate in the best way and with mutual respect.”

Analysts, however, warned that the end game was now in sight for Greece. Either Athens’ leftist-led government moved ahead immediately with modernising reforms that would unlock international aid, or Athens would default “within weeks,” they said.

“The end game is coming, don’t be fooled by these niceties,” political science professor Dimitris Keridis told the Guardian.

“Not a single euro is being disbursed by Europe. In the next few weeks Greece will default unless it enacts reforms immediately.”

Updated

Alexis Tsipras (or his media team), have just tweeted that the Greek PM was ‘incredibly moved’ by the solidarity demo outside the German chancellery.

That rally included Germans carrying banners reading “Germany loves Greece”, and even a kissing marathon (I added some photos earlier in the liveblog)

What the experts say

If you missed the press conference, highlights start at 5.31pm GMT.

Here’s some instant reaction:

And here’s that handshake:

And that’s it.

Angela Merkel thanks the press for coming, and the two leaders then pose for photos with a genuinely friendly-looking handshake.

They’ve now headed off for their working dinner; a chance to establish the common ground that Alexis Tsipras says is vital to solving the crisis.

An upbeat-sounding Tsipras says that today’s meeting could be the first stage in a ‘new relationship’ between Greece and Germany.

Tsipras defends Merkel over Nazi caricatures

Alexis Tsipras leaps to Angela Merkel’s defence at the next question, about Der Spiegel’s front page showing the chancellor superimposed alongside Nazi officers outside the Acropolis (there’s a copy here).

Such caricatures are wrong and unjust, he says. Angela Merkel is a very positive person who wants to listen and exchange ideas.

Updated

All Europeans are equal, says Angela Merkel - and Germany has an interest in having good relations with all member states including Greece.

We’re hearing a lot about the second world war...

Chancellor Merkel adds that she and Alexis Tsipras spoke about the “Future Fund” today.

That’s an initiative created last year to fund socio-economic co-operation and build better relations between the two countries.

Merkel also acknowledges the suffering of Greece during the second world war:

Merkel: War reparations issue is closed

The next question is on Greece’s demand for war reparations.

Alexis Tsipras replies that no-one in the Greek government intends to start confiscating German assets in Greece (as was reported last week).

Our demands for reparations are not ‘material’, he says, and in any case the issue should not be linked to the negotiations over Greece’s debt problem.

Then Angela Merkel speaks, and is pretty clear -- in Germany’s view, the issue of war reparations is already resolved.

Updated

Onto the Question and Answer section....

What progress has been made today, and was Angela Merkel convinced by Greece’s proposals?

Angela Merkel cautions that no-one should expect a result on Greece’s reform programme at today’s meeting.

Tsipras says that he and Merkel are both looking for a solution that benefits both Greece and the rest of Europe.

We must avoid creating new divisions in Europe, Tsipras adds.

Updated

European treaties must be respected, says Tsipras.

And Greece will meet its commitments, but with one important condition -- there must also be social justice.

Tsipras: Greece needs big structural reforms

Alexis Tsipras turns to fixing the mistakes of the past.

Greece needs a new policy mix, he tells the press conference, including big structural reforms to fight tax evasion and corruption.

And he calls for co-operation to fight corruption.

Updated

Tsipras: We must change stereotypes about Greeks, and Germans

Social inequality has grown in Greece, says Tsipras, touching on the humanitarian crisis that grips the country.

But it would be wrong to simply blame foreigners. There are also internal reasons for Greece’s plight.

We must remove the stereotypes that Greeks are lazy, and also that Germans are to blame for the debt crisis.

Tsipras wins the prize for understatement of the day, telling the assembled press that Greece has not been a success story since its first bailout in 2010.

Tsipras remembers his manners, saying he would like to thank chancellor Merkel for giving him the chance to exchange views on the future of Europe.

Now Tsipras is speaking -- saying that today’s meeting is helping the two leaders to understand each other better.

Merkel adds that Greece needs structural reforms and a solid budget, as the foundations for a return to growth.

We want Greece to be strong, pledges Merkel, with its economy growing and unemployment falling.

It’s not up to Germany to evaluate Greece’s reform bill, says Merkel - that’s the role of the entire eurogroup (finance ministers from across the eurozone).

Germany and Greece have close ties, Merkel says. Many Greek people live in Germany, and millions of Germans enjoy holidays in Greece.

Angela Merkel is speaking first, explaining that she and Alexis Tsipras have discussed issues related to the whole eurozone, as well as bilateral issues.

Press conference begins

Angela Merkel and Alexis Tsipras have just emerged from their talks to hold a press conference in the Berlin chancellery.

It’s being streamed live here (right-click to open in a new window).

We may need to brush up on our German and Greek....

Another snap from this afternoon’s meeting:

And here’s a photo from the meeting, which is taking place right now:

Angela Merkel has shown Alexis Tsipras around the government offices, complete with a rather fine clock.

That clock could be a reminder that time is running out, guys....

Alexis Tsipras didn’t get special treatment on his flight from Athens, it appears:

Journalists are gathering in Berlin ready to hear from Angela Merkel and Alexis Tsipras.

I thought the press conference didn’t start for another 50 minutes - perhaps it’s going to be earlier.....

Here’s a video clip of Greece’s anti-austerity prime minister being loudly serenaded down the red carpet by a German military band, on his way to push for debt assistance and war reparations.....

Mario Draghi continues to field questions in the European Parliament, but he’s changed hats - he’s now there as head of the European Systemic Risk Board.

He has just told MPs that Greek banks are solvent ‘at present’, and denied that there is a systemic risks within the eurozone any more.

We’ve also learned a new word:

Tonight’s meeting between Merkel and Tsipras probably won’t yield a breakthrough on Greece’s funding problems, but it might help the two leaders build a better relationship.

As Wolf Piccoli of Teneo Intelligence writes:

Merkel is eager to avoid the political solution Tsipras desires; she has no interest in circumventing the more technical institutions such as the ECB and the Eurogroup.

The meeting will at best help both leaders to improve their personal relationship – which might turn out to be crucial in the coming weeks in which Greece’s future in the eurozone will be at stake. If anything, tonight’s working dinner might provide both sides a chance to come closer to a deal on reparations for German atrocities committed in Greece during WWII.

Updated

Back in the City, the FTSE 100 has closed at a new record high; up 15 points at 7037.

Greek insiders say Tsipras will almost certainly include privatisations in the list of reforms he will propose to Merkel tonight.

However, there may be conditions which potential buyers could baulk at.

Athens correspondent Helena Smith has the story:

The radical left leader is expected to say he will agree to sell-offs as long as the Greek public sector maintains management control over assets.

One well-placed source says:

“The prime minister will say the Greek government has to be in charge of structural reforms and not any other body outside of Greece.”

Ahead of tonight’s meeting, EU commission president spokesman Margaritis Schinas has said that the time for talks is over.

Creditors now want to see specific reforms. he told the Greek daily Kathimerini.

“The Greek side is expected to work fast and to immediately present a list with concrete reforms,” said Schinas who ironically is Greek, adding;

“The time for statements is over, now is the time for work.”

The two leaders reviewed an honour guard during the welcoming ceremony at the chancellery in Berlin:

Updated

Welcome to Berlin, Alexis....

Merkel-Tsipras meeting begins

And here’s Alexis Tsipras -- he’s been greeted by Angela Merkel and the pair are now heading into the chancellery.

Another shot of Angela Merkel waiting for the arrival of the Greek prime minister at the chancellery in Berlin...

The red carpet is down, the military are assembled....and Angela Merkel is ready to receive Alexis Tsipras in Berlin.

Optimism among eurozone citizens has hit an eight-year high, in another signal that Europe’s economy is picking up.

Consumer confidence rose to -3.0, Eurostat reports, up from -6.7 in February.

Angela Merkel has just arrived at the chancellery, reports Efi Koutsokosta of Euronews, unhampered by those demonstrators.

The Greek stock market has finished the day up 3%, as Athens traders clung onto their early optimism. Bank shares jumped around 10%.

That could swiftly unwind tomorrow, though, if there is no progress in Berlin tonight.

Germany’s left wing Die Linke party are also taking part in the demonstration outside the Berlin chancellery:

Photos: Rally for German-Greek co-operation

A crowd has gathered outside the Chancellery in Berlin, as Angela Merkel prepares to meet Alexis Tsipras.

But they’re not protesting against Greece. This is a rally for ‘good German Greek cooperation’, with banners reading “Germany loves Greece.

But can Merkel and Tsipras match this spirit of camaraderie? We’ll find out in a few hours time....

Updated

Draghi denies blackmailing Greece

Mario Draghi has slapped down claims that the European Central Bank is blackmailing Greece, during his session in Brussels.

An MEP criticised the ECB for dropping the waiver that allowed it to accept Greek debt as collateral, and for not including Greece in its QE programme.

Draghi swept this idea aside; pointing out that the ECB has provided more than €100bn of euros to Greece.

Updated

No pressure, Alexis and Angela, but the world’s financial markets are hoping for some progress this week over Greece’s debt woes.

As Ed Atkins, Treasury strategist at RBS Securities in Stamford, Connecticut, put it to Reuters:

“This is an incredibly important week for Greece. The level of anxiety could run high but there is still optimism there will be a resolution between Greece and its creditors.”

Draghi adds that the ECB would willingly restore the waiver that allowed it to accept Greek sovereign debt as security.

But first, it must be confident that Greece’s bailout review will conclude successfully.

Back at the European Parliament, Mario Draghi has defended the ECB’s handling of the Greek crisis (having recently refused to accept Greek bonds as collateral for loans).

We’re simply following the rules, he says.

(that

And here’s how Draghi summed up the state of play in the euro area:

“Growth is gaining momentum. The basis for the economic recovery in the euro area has clearly strengthened. This is due to in particular the fall in oil prices, the gradual firming of external demand, easy financing conditions driven by our accomodative monetary policy, and the depreciation of the euro.”

Alexis Tsipras has arrived at Berlin-Tegel airport.

He was then swiftly swept to a hotel in Berlin, by a phalanx of motorbikes, ready for his meeting with Angela Merkel in around 90 minutes time [see earlier preview].

Updated

Draghi: Cheap oil and weak euro are helping

European central bank chief Mario Draghi is testifying to the European Parliament’s economic and monetary affairs committee now.

Draghi began by telling MEPs that Europe’s economy is recovering, reiterating that the ECB now expects inflation to rise to 1.5% in 2016. He says that the low oil price, and the weaker euro, is helping.

He says that lower funding costs for banks are starting to influence the cost of borrowing for households and companies, just as demand for credit also picks up.

And Draghi repeats his usual mantra that monetary policy cannot fix the crisis on its own. Other players, such as politicains, must deliver their own contribution to put the economy back on track.

The session is being streamed live, here.

Teneo Intelligence analyst Wolfango Piccoli reckons Alexis Tsipras hasn’t exactly lived up to his pre-election rhetoric:

Updated

The ever-volatile Greek stock market has jumped by 2% today, suggesting Athens traders are hopeful about tonight’s talks.

Greek bank shares are leading the list of top risers, with Eurobank Ergasias jumping 10%.

Updated

Greece’s finance minister has a fan in Germany, this graffiti suggests:

The euro is rallying in the currency markets today.

It’s gained 1% against the US dollar today to $1.0921, as currency traders continue to scratch their heads and wonder when the Federal Reserve might raise interest rates.

The euro has also gained 1% against the pound, to 73p, as the looming general election hits sterling. A hung parliament looks more likely by the day:

The strength the euro has pushed down the German stock market, with the DAX falling 1.2%. German exporters had been seen as the big winners from the weaker euro, of course.

Lunchtime summary: Crunch meeting starts soon

A quick recap.

Tension is mounting as Greece’s prime minister, Alexis Tsipras, heads towards Berlin for his first visit to Angela Merkel this afternoon.

They are due to start talks in two and a half-hours time (4pm GMT, or 5pm local time), followed by a press conference.

The meeting is overshadowed by concerns that Greece could run out of liquidity in a couple of weeks, if it cannot extract funds from its creditors.

The Greek government has confirmed that it has written to Merkel, and other key eurozone figures, warning that it would be “impossible” to meet debt repayments without help.

Athens is also planning to raise the thorny issue of war reparations, despite Germany insisting that the subject is closed.

The German government has cautioned that the meeting will not deliver a new deal on Greece’s debts. But Merkel is keen to hear details of the new economic reform plans which Greece is pulling together.

Those plans are crucial if Athens is to persuade its creditors to unlock bailout funds in time.

Financial markets are on edge ahead of the meeting. Marc Ostwald, of ADM Investor Services, says:

With Tsipras ratcheting up the rhetoric on Greece’s immediate debt woes, the post Merkel Tsipras meeting press conference is likely to be the key focal point for the day....

Greece will clearly not be far away from market thoughts as its cash crunch point nears.

Christian Schulz, senior economist at Berenberg Bank, fears that time is running very short:

Tonight, Prime Minister Tsipras has potentially his last chance to convince German Chancellor Merkel that he will ultimately do what it takes to keep Greece in the euro. If he fails to inspire any kind of trust in Berlin, securing the necessary funds to keep going, let alone the inevitable third bail-out in July, while be a fantasy.

The meeting dominates the newspapers in Greece and Germany; with the Bild tabloid running a Greek headline, and even coming up with 50 reasons that they like Greece (honest!) .

Updated

Over in Athens the Greek government spokesman Gavriel Sakellarides has just told MEGA TV that the letter Tsipras penned to Merkel “was one of many” sent to EU officials last week (via Helena Smith)

Other recipients included EU commission president Jean-Claude Juncker and the French president Francois Hollande, he said.

That letter, as explained earlier, warned that Greece wouldn’t be able to meet looming debt payments without some help from the European Central Bank and other creditors.

Sakellarides told Mega that:

“It didn’t say anything more or less than what we had said the previous week.

For anyone who has followed the statements of government officials it is clear that there is a liquidity problem, … and political initiatives have to be taken.”

Sakellarides added that the letter had been dispatched to defend Greek interests.

‘It’s not a question of its being leaked, its about what this letter says.”

Tsipras, he insisted, had raised “exactly” the same points at last Thursday’s mini-summit of EU leaders.

The missive was trying to anticipate the worst, Sakellarides noted, denying that the Greek government was essentially blackmailing creditors with the threat of a credit crunch.

Varoufakis 'cancels London trip'

Bad news for City workers hoping for a glimpse of Yanis Varoufakis tomorrow – the Greek finance minister has cancelled a planned visit to London.

Reuters explains:

Varoufakis was due to talk at a conference in London and attend another couple of events but has called the trip off as crucial talks between Greece and its euro zone partners over the country’s need for financial support heat up.

Updated

Greece to raise war reparations issue tonight

Over, in Athens officials are insisting that the potentially explosive issue of war reparations will be on the table at tonight’s talks.

Our correspondent Helena Smith reports:

In the two hours that Alexis Tsipras will have with the German chancellor this afternoon, the neuralgic issue of compensation for Nazi war crimes will be put on the table, officials say.

“It won’t be the main issue, obviously, but it will be addressed,” a senior insider told me.

The Greek prime minister has said tonight’s talks – long-awaited in Athens – will be all the better not only because they offer a direct point of contact with Europe’s most powerful leader but will be denuded of “the pressure of negotiations” (or, at least, he hopes).

“And that is very important because both sides will be able to discuss the important issues plaguing Europe and also [discuss] the upgrading of bilateral relations between the two countries,” Tsipras said in a statement to Kathimerini.

Greece’s insistence that Germany has a ‘moral duty’ to make amends for the damage caused during the Nazi occupation has pushed the issue into the spotlight. And in recent days, some German Social Democrat MPs have said Germany should consider compensating victims in Greece.

Germany’s foreign ministry insisted this morning that the war reparations issue “is a closed chapter for us”.

But it isn’t going away. This week’s edition of Der Spiegel even shows Angela Merkel stood alongside German troops in Athens, headlined:

“How Europeans see the Germans: The German Ubermacht [superior power]”

Reuters has now published Angela Merkel’s spokesman’s comments about his afternoon’s meeting with Alexis Tsipras.

Steffen Seibert said that the meeting can’t supersede the eurogroup (the eurozone’s finance ministers):

“Greece has an agreement with the Eurogroup, not a bilateral one with Germany. So if there is a reform list shortly as Greece has promised, it will be presented to the Eurogroup, not to individual governments....

But that doesn’t mean Merkel and Tsipras won’t discuss the issue:

“of course it’s interesting for the chancellor to hear from the Greek prime minister’s mouth what his ideas are”,.

German tabloid Bild’s list of “50 reasons we like Greece” is online here.

It’s quite the olive branch, with polite nods to Archimedes, Nana Mouskouri, the overthrow of the Greek military government in 1974, the Trojan Horse and its fantastic tourism opportunities (a nice alternative to Italy and Spain).

Bild can’t quite resist a jibe, though -- number 50 on the list is Greek finance minister Yanis Varoufakis’s luxury retreat, reportedly now available to rent for a mere €5,000 per week.

Government officials in Athens and Berlin are hoping that Merkel and Tsipras can exhibit enough mutual trust to make progress today, says Athens correspondent Helena Smith:

Today’s Bild frontpage has caused a stir in Greece, she adds:

Germany’s foreign ministry isn’t keen to discuss the issue of war reparations, Reuters adds.

  • GERMAN FOREIGN MINISTRY SPOKESMAN SAYS REPARATIONS ISSUE WITH GREECE IS A CLOSED CHAPTER FOR GERMAN GOVERNMENT

Updated

Germany: Greek crisis won't be solved tonight

Back in Germany, a government spokesman has tried to downplay hopes of a breakthrough at tonight’s talks.

Any deal, he says, must come from the Eurogroup of eurozone finance ministers, not between the German and Greek leaders personally.

He also confirmed that Angela Merkel received a letter from Alexis Tsipras a few days ago, but wouldn’t say whether Tsipras had warned that it’s “impossible” to meet Greece’s debts without more help [as covered earlier].

Reuters has snapped the details:

  • GERMAN GOVERNMENT SPOKESMAN SAYS MERKEL DID RECEIVE LETTER FROM GREEK PM DAYS AGO, CANNOT COMMENT ON CONTENT
  • GERMAN GOVERNMENT SPOKESMAN SAYS GREEK REFORM LIST WILL BE GIVEN TO EUROGROUP NOT TO INDIVIDUAL GOVERNMENTS
  • GERMAN GOVERNMENT SPOKESMAN SAYS MEETING BETWEEN MERKEL AND TSIPRAS CANONT REPLACE A SOLUTION WITHIN THE EUROGROUP
  • GERMAN GOVERNMENT SPOKESMAN SAYS MERKEL HAS REPEATEDLY SAID NOBODY SHOULD EXPECT A SOLUTION FROM HER MEETING WITH GREEK PM TODAY

CBI: UK factories hit by sliding exports

Ouch. Britain’s factory sector has suffered its biggest drop in export orders in over two years.

The CBI’s latest survey of the sector, just released, showed that total orders books were flat in March. The index of new export orders fell to -26, the lowest level since January 2013.

The CBI blames the ‘still subdued’ eurozone, and also the strength of the pound for making exports less competitive.

And to complete our paper round-up, Die Zeit reports that Tsipras will present Merkel with some new reform plans today.

That could include tax increases on tobacco and alcohol and raising the retirement age.

Bild welcomes Tsipras to Germany

German tabloid Bild has pulled out all the stops for Alexis Tsipras’s visit, starting with a front page which is half printed in Greek!

And inside, there’s an article called “50 reasons why we are fond of Greeks”.

Bild was heavily criticised last month for encouraging readers to pose for selfies along its campaign against giving “Greedy Greeks” more cash.

So today, it’s trying to be helpful -- presenting a thrifty housewife and a young boy who have a proper grip on financial matters:

Greece’s Ta Nea newspaper says Athens has reached out to Iran to see if it might help by buying some short-term Greek debt to tide it through the crisis.

The structure of today’s meeting is quite interesting.

Angela Merkel and Alexis Tsipras are scheduled to meet around 5pm local time (4pm GMT) and talk for two hours, followed by a press conference to brief the media.

They will then head back inside for a working dinner where issues can be hammered out.

That dinner gives them more time to address their differences, and make some progress. But it also means they can avoid any full-blown rows until after they’ve faced the press.

Both sides at today’s meeting see each other as the bad guy, tweets BBC Europe editor Katya Adler:

Berenberg: Greek situation looking desperate

Greece’s looming cash crunch (see earlier post) means it’s vital that Alexis Tsipras establishes trust with Angela Merkel tonight.

Christian Schulz, senior economist at Berenberg Bank, argues that it could be his last chance to build bridges with the chancellor:

The news out of Athens is getting more and more desperate, with the government apparently on track to run out of money in early April

Having learned the hard way that Europe cannot be blackmailed, it is difficult for us to understand why Syriza is dragging its feet on implementing the necessary reforms to secure funding and why it subjects the Greek people to deepening economic and financial crisis. Tonight, Prime Minister Tsipras has potentially his last chance to convince German Chancellor Merkel that he will ultimately do what it takes to keep Greece in the euro. If he fails to inspire any kind of trust in Berlin, securing the necessary funds to keep going, let alone the inevitable third bail-out in July, while be a fantasy.

Last night’s Andalusian election results may suggest that Podemos is now losing ground, just a year after being founded, argues Berenberg Bank:

They writes:

Is Podemos’ star sinking already?

After beginning to gradually fall in the polls as Spanish media turned their focus on the party’s links with Venezuela, Spain’s Syriza-equivalent Podemos failed miserably to win the election in one of Spain’s worst hit regions.

In Andalusia, where unemployment is 34%, the mainstream centre-left Socialists obtained 35.5% (down from 39.5% in 2012), the centre-right Popular Party of Prime Minister Rajoy 26.7% (down from 40.7%) and the upstart liberal party Ciudadanos 9.3%, putting pro-European parties at 71.5% together. By contrast, Podemos only collected 14.9%.

In case you missed it....Spain’s anti-austerity party, Podemos, secured third place in regional elections last night.

Podemos won 15 seats in the Andalusia parliament, as some voters broke away from the two-party system that’s dominated Spanish politics for many years. That deprived the Socialist party of a majority, but it’s not quite the landmark moment that some Podemos supporters hoped for.

The Socialists came first with 47 seats, followed by the centre-right People’s Party with 33 seats.

Podemos did surge to victory in one district; Cádiz, where the unemployment rate has hit depression-era levels above 40%.

How close is Greece to running out of funds?

Germany’s Frankfurter Allgemeine newspaper reported yesterday that Athens has just two weeks to secure fresh aid before the situation becomes ‘critical’.

And that’s because it faces a €465m repayments to the IMF on April 9, which could be tricky to repay unless its creditors have provided help by then (as Alexis Tsipras urged in his letter to Angela Merkel).

Greece faces further payments are due on May and June, and must also ‘roll over’ billions of euros of short term debt (or bills) each month. This chart from Bruegel shows the hurdles ahead:

Updated

James Bullard, president of the St. Louis Federal Reserve, has predicted this morning that Greece could leave the eurozone.

But speaking on CNBC, Bullard also warned it would be a mistake and leave Greeks facing a ‘bleak’ future.

The mood in Germany

Our Berlin correspondent, Kate Connolly, reports that German sentiment towards Greece has soured in recent months, as some lose patience with Athens’ demands for more help.

One Berliner, Christiane Schneider, told Kate:

“I really don’t know how much longer we should keep patting their backs and telling them everything’s going to be alright – here’s an extra 100m.

If my son kept coming to me for money to get himself out of trouble, I’d help him immediately, but I’d want to see that he was trying to get out of any mess he’d got himself into, wouldn’t I? I couldn’t afford to keep tossing banknotes in his direction.”

Tsipras’s calls for war reparations appears to have split Germany; with some resenting the demands, but others acknowledging that it has some merit.

Kate writes:

Georg Franke, a 57-year-old market-stall holder in Potsdam, said while he believed the Greek government’s behaviour had been “childish”, he did not find its second world war compensation claims so outlandish.

“The trouble is, Germans know a lot about the atrocities carried out in their name by the Wehrmacht and the SS against the Jews from Germany, Poland and Hungary, as well as the Slavs, but we learnt very little in school about the horrors carried out against the Greeks. It was only recently, around the 70th anniversary of the liberation of Auschwitz, that I saw a documentary which touched on how they [Jewish Greeks] were almost all wiped out and it brought it home to me.”

The FTSE 100 index of leading shares has dropped back down to the 7,000 mark in early trading, down 22 points. So no new record high yet.

Other European markets have dipped a little too, having hit seven year highs on Friday, as traders fret about the Greek debt crisis.

Jasper Lawler, market analyst at CMC Markets, explains:

It should prove to be another decisive week for Greece as Greek Prime Minister Tsipras is set to meet German Chancellor Merkel.

Athens is hoping to improve relations with its biggest EU creditor before announcing a more detailed set of reforms required to unlock the next instalment of aid.

Eurozone finance minister could meet again soon, if Greece produces those reforms....

Updated

Hajo Funke, political scientist with Berlin’s Free University, says that “two worlds will collide” when Merkel and Tsipras sit down this afternoon

He explained to AFP that:

“There is the political world of Greece, where a left-wing government faces a society in collapse, (of) societal decay... as grave as anything we have seen in western Europe since 1945.”.

“The other world is a content country that is dominant in Europe, Germany, which worries about maintaining its economic happiness, and which is now being asked to help the other, under conditions it doesn’t fully understand.”

German politicians hope that Alexis Tsipras will arrive in Berlin with details of the new reform plans.

Thomas Oppermann, parliamentary leader of Merkel’s Social Democrat coalition partners, says Greece must deliver on the pledges made at Thursday night’s mini-summit in Brussels.

“I expect [Mr Tsipras] to present this list in his talks with the chancellor on Monday.

“I want to know once and for all if Greece is ready to reform or not.”

Greek insiders, though, have suggested this list might not be ready until Easter....

Tsipras: Impossible to pay debts without help

Alexis Tsipras has raised the stakes ahead of today’s meeting with Angela Merkel by declaring that Greece cannot meet looming debt repayments without help from its creditors.

In a letter sent to Germany last week, Tsipras warned that the lack of bailout funds mean it is “impossible” to service debt obligations due in the coming weeks (such as debt repayments and publc sector wage bills)

He also criticised restrictions imposed by the European Central Bank which prevent Athens issuing more short-term debt to tide itself over.

Tsipras urged Merkel not to allow a “small cash flow issue” to turn into a major crisis.

Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations during the Spring and Summer of 2015 (primarily to the IMF), it ought to be clear that the ECB’s special restrictions when combined with the disbursement delays would make it impossible for any government to service its debt obligations.

He added that:

Servicing these repayments through internal resources alone would, indeed, lead to a sharp deterioration in the already depressed Greek social economy – a prospect that I will not countenance.

It suggests Tsipras will push Merkel hard tonight to unlock some of the €7.2bn bailout funds which its lenders are holding back, until they see credible reform plans.

The FT’s Peter Spiegel, who published the letter, has analysed the full text here:

Tsipras letter to Merkel: the annotated text

Updated

The Agenda: Mr Tsipras goes to Berlin

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

German MPs laughed last week when Angela Merkel told them she was looking forward to meeting - and perhaps arguing - with her Greek counterpart today. But there may not be too much mirth in Berlin tonight as the chancellor hosts Alexis Tsipras for the first time.

The two leaders will meet as concern swirls that Greece could soon run out of cash, unless it can satisfy its creditors.

Tsipras has told Greek media that the meeting with Merkel is an opportunity to talk “without the pressure of any negotiation”. His officials are busy working on new economic reform plans which will, they hope, finally persuade its creditors to hand over some bailout funds.

But the meeting comes after two months of rising tensions between the two countries since Tsipras won power in late January, and began pushing for a new debt deal.

His call for war reparations has raised the tensions in Germany too.

And back home, Tsipras also faces pressure from hard-line members of his own party who fear he may cave in to eurozone demands.

Athens correspondent Helena Smith reported last night:

On both sides, the talks are being seen as a “moment of truth.” Greece has made clear, under its new government, that it does not want to leave the eurozone and Tsipras his point that austerity needs to be eased. In Athens officials are putting on a brave face.

“We are looking forward to this meeting,” said the Greek government spokesman Gavriel Sakellarides. “There’s a good chemistry between the two leaders. It’s much better that they talk directly to one another.

But many also fear that in a bid to douse dissent within his own party, Tsipras is trying to buy time hoping that fellow anti-austerians are elected elsewhere in Europe. And that Merkel, bowing to rising anti-Greek sentiment among her own constituency, will also push too hard.

The meeting starts in mid-afternoon, with a press conference scheduled before a ‘working dinner’:

Also coming up today, ECB president Mario Draghi is testifying to the European Parliament’s economic and monetary affairs committee.

Draghi may sound more confident about economic prospects, given recent signs of recovery in the euro area.

Stan Shamu of IG says:

Given all the measures that have been introduced by the ECB and signs of bottoming in data, there is a good chance Mr Draghi will give a more upbeat assessment of the economy.

Draghi’s should also field questions on the Greek crisis, given the ECB is effectively keeping its banks alive with vital liquidity support.

Two pieces of economic data to watch out for:

  • 11am GMT: the latest CBI survey of UK industrial trends
  • 3pm GMT: the latest eurozone consumer confidence survey

And European stock markets are expected to rise this morning, with the FTSE 100 on track to hit a fresh all-time high after breaking through the 7,000-point mark on Friday.

I’ll be tracking all the main events through the day....

Updated

 

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