July 12, 2015 / 1:25 PM / 4 years ago

"Kindergarten" as weary euro ministers divide over Greece

* Tempers fray after months of repeated abortive talks

* New Greek minister calm at eye of storm

* Germans, French work to contain divisions

* Rift spreads across Europe, including within governments

By Jan Strupczewski and Alastair Macdonald

BRUSSELS, July 12 (Reuters) - Caught between the rock of throwing good taxpayers’ money after bad in Greece and the hard place of opening a dangerous crack in their common currency, tempers are fraying among euro zone ministers meeting in Brussels.

So heated did arguments become after nine hours of their sixth emergency council in three weeks that the chairman called a surprise halt just before midnight on Saturday in the hope talks which resumed on Sunday could proceed with clearer heads.

“It was crazy, a kindergarten,” said a source familiar with the arguments in the Eurogroup among increasingly weary finance ministers. “Bad emotions have completely taken over.”

Unlike many of a dozen previous meetings they have had since Greeks despairing of creditor-imposed austerity elected leftist Prime Minister Alexis Tsipras in January, some of the sharpest exchanges were not with their Greek colleague but each other.

By contrast, Greek Finance Euclid Tsakalotos, appointed last week in place of the often provocative Yanis Varoufakis, seemed calm and expressed a willingness to take steps to convince creditors Athens could be trusted to implement budget and economic reform measures to unlock tens of billions of euros.

Another official close to the talks said the adjournment was prompted by a particularly heated exchange - on Greece’s ability to service its debts - between European Central Bank chief Mario Draghi and German Finance Minister Wolfgang Schaeuble.

In response to Draghi, one participant quoted Schaeuble as saying: “I’m not stupid.” The veteran German conservative leads a hardline faction in the talks which warns Greece that it faces ejection from the 19-country euro zone if it does not do much more to earn its third bailout in five years.

France, which along with the European Commission and ECB is warier than many in Germany of allowing a “Grexit” that could undermine faith in the entire currency, has worked with Greek officials to shape their proposals. With Italy, France shares concerns about Greek promises but is concerned Germany, or at least Schaeuble, is too inflexible, euro zone sources said.

One said that after months of frustration with their former Greek counterpart, some ministers were impatient with Schaeuble: “He’s switched roles with Varoufakis,” the source said.

A Greek official said he feared some in the room had made up their minds to force Athens out of the euro zone. Schaeuble’s ministry drafted a paper saying a “time-out” for a few years was the alternative to much more sweeping reforms, though several sources said Schaeuble did not spell that out at the table.


“Schaeuble’s positions are irresponsible and can bring disaster,” said Gianni Pittella, an ally of Italian Prime Minister Matteo Renzi. Leader of the centre-left bloc in the European Parliament, Pittella spoke at a meeting in Brussels.

That reflects something of a left-right split across Europe.

French President Francois Hollande’s Socialist party issued a comradely appeal to Sigmar Gabriel, the German Social Democrat leader who sits as deputy to conservative Chancellor Angela Merkel in a coalition. It said: “The peoples of Europe do not understand the increasingly hardline position taken by Germany.”

Gabriel, also in Brussels, said he aimed to keep Greece in the euro and stressed that France and Germany, traditionally the twin motors of European integration, would work together.

Schaeuble is far from alone in demanding more from Greece and a draft Eurogroup statement, to be passed to Merkel and the other leaders meeting later on Sunday for endorsement, spells out a long list of measures Athens must take straight away.

With its Eurosceptic coalition allies furiously opposed to giving more cash to Greece, the new Finnish government is also pressing for more. Poor, ex-communist states in the east are also finding it hard to justify to their voters why they should pitch in more money for Greeks who are better off than they are.

And in a reflection of annoyance among other states that imposed painful austerity in exchange for help, the Portuguese minister told Tsakalotos that the third bailout he was seeking - possibly over 80 billion euros - was bigger than the only one given to Portugal, a source familiar with the talks said.

A nation of similar size, Portugal received a 78-billion euro bailout in 2011. Greece has already had 240 billion euros.

There are also divisions among governments, reflecting the stakes and difficulty of the dilemma.

“The rift in this question runs right through Europe,” Austrian Chancellor Werner Faymann said. “The German finance minister seriously wants to push Greece out of the euro; the German chancellor, on the other hand, is very anxious to find a constructive solution. And it’s like that in many countries.”

And for many of those involved, what is a stake is not money but whether shared aspirations for European unity are better served by applying rules strictly or bending them if need be.

As ministers haggled, Martin Selmayr, the German chief-of-staff to EU Commission head Jean-Claude Juncker, found time to tweet a link to a German TV sketch entitled “Our Precious German Euros”. Two friends work up a frenzy repeating to each other recent media comments about lazy Greeks and thrifty Germans.

The joke is on them. “Something’s at stake that we don’t talk about any more,” runs the satirist’s punchline. “Europe.” (Additional reporting by Francesco Guarascio in Brussels and Georgina Prodhan in Vienna; Writing by Alastair Macdonald; Editing by Giles Elgood)

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