(Bloomberg) -- German Chancellor Angela Merkel will seek accommodation in talks with Greek Prime Minister Alexis Tsipras to calm the increasingly combative rhetoric between the nations and regain control over efforts to keep Greece in the euro.
Merkel, as leader of the biggest contributor to Greece’s 240 billion-euro ($255 billion) bailout, is willing to go a long way to find a compromise, said a German official with knowledge of her thinking, who asked not to be identified discussing internal strategy. Nonetheless, she’ll tell Tsipras during meetings in Brussels and Berlin over the next five days that she expects Greece to play by the rules, the person said.
After weeks of sparring between Greece and Germany, Merkel is pursuing the talks now to try and get the discussion back on track, the official said. Any suggestion that she will deliver an ultimatum to Tsipras is complete nonsense and propagated by those who want to inflame the standoff, the official said.
Merkel sees the meetings with Tsipras as more of a chance to get to know him, and doesn’t plan to directly negotiate the details of Greece’s fate, which she sees as a matter between Athens and its creditors, the official said. Her room for leeway on Greece is in any case limited by resistance from within her own parliamentary group, according to the official.
Merkel is convinced that now is the “right time to hold extensive talks,” Steffen Seibert, her chief spokesman, said Wednesday in Berlin. “The talks will be about the situation between Greece and the other members of the euro area and how a way forward can be achieved.”

Acrimonious Exchanges

Tsipras is pinning his hopes to reach a breakthrough on a meeting he’s requested with Merkel, European Central Bank President Mario Draghi, French President Francois Hollande and European Commission head Jean-Claude Juncker on the sidelines of a European Union summit that starts Thursday. Merkel has also invited Tsipras to Berlin March 23 for one-on-one talks.
The two nations have been locked in acrimonious exchanges in recent weeks over the continuation of Greece’s austerity program and whether Germany should pay additional reparations for the Nazi occupation of the country during World War II.
“Many Greek people falsely believe that what is at stake is not Greece’s very problematic economic performance and the European Union’s mismanagement of the euro-zone crisis but a dispute between Greece and Germany,” said Dimitris Sotiropoulos, an associate professor of political science at the University of Athens.

Debt Payments

Euro-region finance ministers are urging Greece to draw up a plan to fix the economy in exchange for emergency loans to keep the country afloat. As Tsipras challenges his creditors to blink first, his government’s money is running out, raising the prospect of a cash crunch as early as this month. The country faces more than 2 billion euros in debt payments Friday, and government salaries and pensions must be paid at the end of March.
The ECB raised the maximum amount of emergency liquidity available to Greek lenders by 400 million euros on Wednesday, less than the about 900 million euros the nation’s central bank had requested, people familiar with the decision said.
Greek banks were cut off from regular ECB funding operations in February, forcing them onto Emergency Liquidity Assistance from the Greek central bank. The Frankfurt-based ECB has the power to curb ELA and is reviewing it weekly amid concern that banks will use it to finance the Greek government and so violate European Union law.

Defiant Tone

Earlier Wednesday, Tsipras struck a defiant tone during a speech in Athens, railing against the country’s creditors, which he said used to come to Greece to inspect ministries and “humiliate” local officials with questioning, sometimes making elected leaders wait until the early hours of the morning. “We will not tolerate such phenomena, either in Greece, or abroad,” he told parliament.
“People have asked us to put an end to austerity and bailout agreements, to begin the process of reclaiming the dignity of the nation,” Tsipras said. “We respond today, tomorrow and on Friday in parliament by building a wall of sovereignty and dignity.”
To contact the reporter on this story: Arne Delfs in Berlin at adelfs@bloomberg.net
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Celeste Perri, Eddie Buckle