Dresden, Germany - Germany rejected on Wednesday Athens’ claims that it was close to a deal with its international creditors as the world’s top financial officials gathered in Dresden for a meeting overshadowed by the Greek debt crisis.
Global markets rebounded on Wednesday ahead of a two-day meeting of the world’s top financial officials in the eastern German city after Greek Prime Minister Alexis Tsipras said his cash-strapped state was on “the final stretch towards a positive deal.”
But members of the German delegation in Dresden for the meeting of the Group of Seven (G7) finance ministers and central bankers said: “We have not advanced much further on the matter.”
The German officials went on to express surprise at the statements from Athens saying that cash-strapped Greece was close to reaching a deal with its European Union and International Monetary Fund creditors.
The threat that Greece could soon run out of money formed part of a preparatory round of talks by officials on Wednesday before the formal launch of the G7 meeting on Thursday.
The G7 ministers are also due to consider the first steps for launching a code of conduct for bankers as well as ensuring a crackdown on international corporations sidestepping national tax laws is introduced by the end of the year.
Hopes that Greece might be edging its way towards an agreement with its international creditors following optimistic comments from Athens resulted in share markets posting solid gains on Wednesday following steep falls over the previous 24 hours.
The ministers from Germany, Italy, France, the US, Japan, Britain and Canada visited Dresden’s reconstructed baroque Frauenkirche, or Church of Our Lady, on Wednesday evening.
The church has become a symbol of the rebuilding of the city after it was all but destroyed in allied bombing raids near the end of World War II 70 years ago.
Finance ministers and central bankers will be joined in their opening session on Thursday by leading academics for a discussion on the prospects for the world economy.
After starting the year on a high note, global growth appears to have stumbled into a period of weakness led by slowing economies in the US, China and Germany. Growth in Japan has also fallen short of expectations.
The eurozone has emerged as something of a bright spot for the first time in years as signs point to painful economic reforms bearing fruit in nations such as Spain and Ireland that have been at the centre of the region’s long-running debt crisis.
But looming large over the 19-member currency bloc is the tense standoff between Athens and its creditors amid concerns that Greece could accidentally stumble out of the euro.
Germany, which currently holds the G7 presidency, is planning for an informal meeting of ministers in Dresden.
Instead of the meeting becoming bogged down in drafting a communique, German Finance Minister Wolfgang Schaeuble, who will chair the meeting, is to issue a statement on the ministers’ deliberations.
The Dresden meeting will also help set the stage for next month’s summit of G7 leaders, which is to be chaired by German Chancellor Angela Merkel and held in the Bavarian alpine retreat of Elmau Castle.
Officials have described the Dresden meeting as a brainstorming session for the leaders’ summit in Bavaria.
The finance ministers are also expected to sign off this week on measures aimed at beefing up the fight against financing terrorism amid concerns about Islamic State’s apparent success in raising funds to back their bid to form a caliphate in Syria and Iraq.
Still, the really contentious issues are likely to be off Dresden’s formal agenda, but to dominate discussions on the margins of the
meeting. This is expected to include the Greek debt crisis.
However, four of the key players in the talks with Athens – International Monetary Fund chief Christine Lagarde, the European Central Bank’s Mario Draghi, Eurogroup chief Jeroen Dijsselbloem and the European Commissioner for Economic and Financial Affairs Pierre Moscovici – are attending the Dresden meeting.
Washington is also likely to press its European partners and the IMF to step up their efforts to resolve the Greek debt crisis.
In addition, the US is expected to use the gathering in Dresden to renew its pressure on Germany to act to help stimulate the global economy through launching new public investment programmes aimed at boosting domestic demand.
ANA-dpa