Greek PM Tsipras to meet Merkel as tensions build with Berlin

Greek finance minister Yanis Varoufakis denies giving Germany the finger during talk

Greece’s finance minister Yanis Varoufakis. Athens faces questions over its determination to tackle tax evasion by rich Greeks. Photograph: Jasper Juinen/Bloomberg

Greece’s finance minister Yanis Varoufakis. Athens faces questions over its determination to tackle tax evasion by rich Greeks. Photograph: Jasper Juinen/Bloomberg

 

Greek prime minister Alexis Tsipras will face down his German critics – and Chancellor Angela Merkel – next Monday on his first official visit to Berlin.

Tensions between the two countries have reached new heights after the Greek finance minister Yanis Varoufakis was shown apparently giving the finger to Germany in a video shown on a Sunday night talk show.

Mr Varoufakis hoped to use his first German prime time appearance – via video-link – to address German stereotypes about “the Greeks” and explain the “unimportant liquidity problem” his country faces.

But that came to nothing after German public television showed glossy “at home” images of him and his wife from Paris Match magazine and a May 2013 video from a talk he gave in Zagreb. In the video, Mr Varoufakis says Greece should default on its loans, “stick the finger to Germany and say . . . you have to solve the problem by yourself” – apparently giving the finger as he says this.

“That is a montage, I’m ashamed to be considered capable of something like that,” said Mr Varoufakis.

With five million Germans watching, Mr Varoufakis came under attack from some of his most strident German critics. Bavarian finance minister Markus Söder, for instance, accused the Greek minister of being more interested in PR than politics, having given 40 interviews since taking office in January.

“With every interview it gets worse,” said Mr Söder, demanding that Athens fire the Greek defence minister for threatening to send refugees in Greece to swamp Berlin.

Noting the populist political tradition in Mr Söder’s own Christian Social Union (CSU), Mr Varoufakis said that “the CSU of all parties must know how difficult it is to put ministers on a chain”.

Asked whether he supported demands for Berlin to repay a forced Nazi-era loan, still allegedly outstanding, Mr Varoufakis said: “It’s not about the money but a moral question. As far as I’m concerned, pay one euro.”

The debate over the forced loan continues to reverberate in the German media, with many Germans in favour of Berlin conceding it still owes money extracted by force between 1942 and 1944 and today estimated at between €6 billion and €10 billion.

As Athens works to present acceptable reforms, and secure an extension of its EU/IMF programme, the forced loan will hang over next Monday’s visit by Mr Tsipras to Berlin. Last week he accused Germany of legal “trickery” for not paying the bill after unification in 1990. Berlin says it considers all outstanding payments to Greece settled: legally, politically and morally.

Meanwhile Athens faces questions over its determination to tackle tax evasion by rich Greeks. Swiss authorities say they have waited 13 months for help from Athens on 800 million francs (€751 million) in suspected untaxed funds deposited in Swiss banks.

Swiss finance minister Eveline Widmer-Schlumpf said she informed Athens of the deposits in February 2014 and offered assistance in regulating the matter. Since then, however, she said she had heard nothing.

“It’s now up to Greece to make sure that all potential people obliged to pay tax do so,” she said.

Beyond the suspected tax-dodge money, Swiss authorities say they are examining hundreds of millions of funds linked to other Greek sources, from crooked Greek entrepreneurs to criminal gangs.

In one case, investigators are probing the finances of a Greek businessman operating in Switzerland on suspicion of criminal activity and money-laundering. They have frozen bank accounts holding 35 million francs (€33 million) but say the investigation has been put on hold until Greek authorities respond to Swiss requests for information.

In another outstanding case, Swiss investigators suspect a bank of giving unsecured loans worth €701 million to firms linked to the bank’s largest shareholder. The bank was later nationalised and refinanced with €900 million in EU/IMF money.