Tsipras, Merkel urge end to ugly eurozone 'stereotypes'

(BERLIN) - Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel on Monday urged an end to the vicious "stereotypes" and name-calling that have threatened to rip the eurozone apart.

After weeks of bitter acrimony between the new radical-left government in debt-mired Greece and the eurozone's effective paymaster, Germany, both leaders were at pains to stress their common ground on the debt crisis.

Tspiras, making his first visit to the German capital since taking office in January, told reporters "neither are the Greeks lazy louts nor are the Germans to blame for Greece's ills -- we have to work hard to overcome these stereotypes."

Merkel said she agreed that Europe must "surmount these types of stereotypes" about good and bad eurozone members to ensure the future of the currency.

"We both have a vested interest in building cooperation based on trust," Merkel, 60, said.

Tspiras, 40, praised the German leader, who has been caricatured as a bloodthirsty Nazi in Greece for her insistence on swingeing reforms, as a straight-shooter.

"Ms Merkel listens and wants to make progress in discussions," he said.

But entrenched differences surfaced during the 35-minute press conference between an initial round of talks and a working dinner at Merkel's imposing glass-and-steel chancellery.

Tsipras said the budget cuts and structural reforms demanded over the last five years in exchange for two bailout programmes had not been a "success story" but rather brought his country to its knees.

The austerity path Merkel has championed has had "horrible effects" including mass unemployment, widespread poverty and social unrest in Greece.

"A new political mix must be found," he insisted while pledging more decisive action than his predecessors on fighting corruption and tax evasion.

Merkel repeated her frequent refrain that the only sustainable solution to the debt crisis is fiscal discipline.

"What is crucial is that the economic fundamentals are there. What types of reforms are implemented can be discussed with the institutions," she said, referring to what was formerly called the "troika" of the European Commission, the European Central Bank and the International Monetary Fund.

She dismissed the frequent portrayal of the Greek debt crisis as a zero-sum game between Berlin and Athens.

"Germany is not the institution that decides whether the reform programme is correct or sufficient," she said.

But she added: "We want a Greece that is economically strong, we want growth in Greece and -- this is key -- we want to reduce the very high unemployment among the young."

- 'A moral issue' -

As tensions have flared, painful historical memories have resurfaced, with Tsipras's government reviving reparation claims for the Nazi occupation of Greece in World War II.

In his opening statement, Tsipras stressed that Greece did not see the case as closed, insisting that it was a "moral issue" that must still be resolved.

But he distanced himself from calls in Athens for the Greek government to seize German property to settle wartime claims, such as the Goethe Institute cultural centre.

"You can forget that -- that doesn't apply," he said, adding "today's Germany has nothing to do with the Germany of the Third Reich which spilled so much blood".

Merkel said she saw the issue of reparations as "politically and legally resolved" but said Germans were aware "of the atrocities we committed" and took their responsibility for the crimes of the Nazis "very, very seriously".

Greece's creditors agreed in February to extend its 240-billion euro ($260-billion) bailout by four months in exchange for promises of further reforms.

At an EU summit last week, Athens lobbied Brussels to release vital funds left in the bailout package to help it make payments to creditors in the coming days, and avoid bankruptcy and a possible sudden exit from the euro.

Instead, the EU offered two billion euros in unused development funds to Greece after Tsipras vowed to clarify reform pledges demanded by the country's creditors. But that money will not go into government coffers.

Tsipras's spokesman revealed Monday that the prime minister sent Merkel a letter on March 15 warning it would be impossible to service his country's crushing debt without fresh EU cash.

The Greek leader said later that he had not come to Berlin hat in hand but rather wanted to "build a common foundation" for dialogue between the two countries.

"It is better to talk to each other and not about each other," he said.