European solidarity tested in the face of resistance and tragedy

The theme of European solidarity came to the fore in Europe in very different ways this week.

On Monday, Greek prime minister Alexis Tsipras visited Berlin for the first time since his election. The meeting, which yielded little in terms of progress on the Greek bailout, was important symbolically.

German-Greek relations have been badly damaged since the election of the Syriza-led government in January, as anti-German rhetoric has flared over the revival of the issue of German war reparations. The meeting between the German and Greek leaders was in many ways an attempt to smooth those differences.

Speaking after the meeting, German chancellor Angela Merkel insisted there should be no divisions in Europe.

"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."

Barely a day later, Merkel was facing one of the biggest national disasters of her premiership. The loss of 72 German nationals, including 16 schoolchildren, on Germanwings flight 4U 9525 was one of the largest losses of life in a single incident in recent German history. It also had a strong European dimension. The fact that the 16 German students who lost their lives had been participating in a school exchange programme with a Spanish school was particularly poignant. This was European integration and solidarity in action.

Profound ramifications

How far European solidarity is prepared to stretch will be key to how the current Greek drama plays out in the coming weeks.

Greece

is reaching a defining moment in its relationship with Europe, one that could have profound ramifications for the future of integration as the possibility of Greece leaving the euro becomes a distinct possibility.

The very notion of a European prime minister coming to Berlin and raising the question of Nazi war reparations would have been unthinkable a few years ago. It shows that Tsipras – emboldened by strong public support in Greece – is prepared to test the commitment to keeping the euro together to its limits.

In reality, Greece's public finances are in a precarious position. According to Reuters, Greece could run out of money by April 20th if it is not granted fresh funding by international lenders. A report by Deutsche Bank this week highlighted a €460 million debt repayment to the IMF on April 9th as a possible trigger for default.

Greece must also roll over €2.4 billion worth of T-bills – a form of short-term debt – next month, as well as meeting its regular bills such as public sector salaries and wages.

While little detail has emerged from the Merkel- Tsipras meeting, a government spokesman confirmed this week that Greece will submit a list of reforms by next Monday. Whether these will be enough to convince its lenders to provide more funds to Greece remains to be seen.

In particular Greece is looking to unlock specific sources of financing, including €1.9 billion of profit on bonds held by the European Central Bank. It is also seeking about €1.2 billion of funds remaining in the bank bailout fund, which it believes should not have been returned last month.

Under scrutiny

In parallel, the Greek banking system is under scrutiny. Speaking in Brussels on Monday, European Central Bank president

Mario Draghi

said the solvency of Greek banks was not a concern, as they met a number of regulatory requirements including indicators such as common tier one ratio and the total capital ratio. But he warned that their liquidity had deteriorated, and noted that the ECB had provided Greek banks with €104 billion of emergency liquidity – more than twice the level provided in December.

With the next official euro group meeting scheduled for April 24th in Latvia, which holds the rotating EU presidency, euro zone finance ministers may meet before then to consider any decision to unlock funds. Ultimately, Tsipras and his government need the political support of his fellow European countries if he is to secure the funds to keep his country solvent over the next few weeks. The events in the French Alps this week are a reminder to him, as he continues to negotiate with lenders, that European solidarity is often a more powerful force than antagonism.