Berlin's firm stance on Greece exposes divergence with Paris

Germany has broken ranks with Paris and Brussels in slamming the door on talks with the Greek government on a new bailout deal before Sunday's crucial referendum, analysts say.

After weeks in which German Chancellor Angela Merkel and French President Francois Hollande appeared united in their efforts to end a stalemate with Athens, the discord could hardly have been clearer.

While the European Commission, backed by France, was still manoeuvring to try clinch a last-minute accord between debt-laden Greece and its creditors Wednesday, Berlin slammed on the brakes.

Addressing the German parliament, a seemingly sanguine Merkel said Europe could "calmly" await the outcome of Greece's referendum on bailout conditions because the bloc was "strong".

Besides, "a good European is not one who looks for an agreement at any price", she insisted.
She also reiterated the position of her finance minister, Wolfgang Schaeuble, that a new aid deal between Greece and its creditors could not be negotiated before the referendum.

But in a nearly simultaneous declaration, Hollande said that an agreement was needed "immediately".

"It's been a while that we've been talking about this agreement -- it must happen now," he said.

On Thursday, French Prime Minister Manuel Valls denied any "distance" between Berlin and Paris.

- Grexit 'worries many' in Berlin -

Greek Prime Minister Alexis Tsipras took his international partners by surprise last Saturday by announcing he would put the decision on their bailout terms in the hands of the Greek people, leading to a breakdown in talks and fuelling fears of a "Grexit".
Germans may at times appear unmoved at the prospect of Greece crashing out of the euro, but it "in fact worries many" in Berlin, as well as in Paris or Brussels, said Claire Demesmay, political scientist at the German Council on Foreign Relations.

She said the scenario would also be a "personal setback" for Merkel, seen as the ideological heir to ex-chancellor Helmut Kohl, who oversaw the creation of the single currency.

But Demesmay said that the differences between Merkel and Hollande on the Greek crisis boiled down to differences in "method", rather than substance, and could be explained by differences in public opinion in the eurozone's two biggest economies.

"The different positioning is explained by the different domestic situations," she told AFP.
"In France, Hollande is being pushed to be more flexible, in Germany Merkel is being pushed to be firmer," she added.

Fundamentally, however, the two leaders are "relatively close" and share a belief in "solidarity in return for individual responsibility", she said.

Both want an accord with Athens, but insist on strict economic reforms in exchange.

Berlin must also be mindful that any deal negotiated with Greece must win the support of the Bundestag, or lower house of parliament.

Merkel knows that this not only takes time but could cost her political capital given growing dissent within her conservative party on the Greece issue.

- Pressure on Merkel -

But cultural differences are also at play.

Many Germans were genuinely shocked by Tsipras's sudden decision to call the plebiscite after he rejected the latest bailout proposal by European governments, the European Central Bank and International Monetary Fund.
It was widely viewed as a departure from the rules.

Merkel also insisted in her Wednesday address on respect for Europe's rules, but these are often interpreted more freely in France -- especially in the debate over the EU's budget deficit limits, which Paris exceeds.

Elsewhere, the German chancellor faces pressure from other countries such as the Netherlands, Finland, Slovakia and Austria, for whom she has become a spokeswoman for a shared firm stance on Athens.

France, meanwhile, is "relatively isolated" and eyes a moderate role for itself that falls somewhere between Greece and the more inflexible countries, Demesmay said.

Other southern nations, including Spain and Portugal, point to the far-reaching social and political sacrifices they have had to make in return for aid, she noted.

France may have struck a more conciliatory tone towards Greece this week with an eye to carving out a role for itself as a mediator after the referendum, several observers say.

Hollande stressed this week: "Our responsibility is to ensure that Greece stays in the eurozone."