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ECB hits out at Greek 'blackmail' claims as Angela Merkel holds steady in bail-out demands

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German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras address a news conference following talks at the Chancellery in Berlin March 23, 2015.  Tsipras, pressing for cash to keep his country afloat, began talks with Merkel on Monday after Berlin ruled out any breakthrough in differences with the euro zone over Athens's international bailout.     REUTERS/Hannibal Hanschke

German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras address a news conference following talks at the Chancellery in Berlin March 23, 2015. Tsipras, pressing for cash to keep his country afloat, began talks with Merkel on Monday after Berlin ruled out any breakthrough in differences with the euro zone over Athens's international bailout. REUTERS/Hannibal Hanschke

REUTERS

German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras address a news conference following talks at the Chancellery in Berlin March 23, 2015. Tsipras, pressing for cash to keep his country afloat, began talks with Merkel on Monday after Berlin ruled out any breakthrough in differences with the euro zone over Athens's international bailout. REUTERS/Hannibal Hanschke

The European Central Bank hit back at claims it is “blackmailing” Greece over its protracted bail-out, as the impasse between Athens and its international creditors showed no sign of easing on Monday.

In his first formal talks with Germany since taking office, Greek Prime Minister Alexis Tsipras put on a show of solidarity with counterpart Angela Merkel, promising to “avoid division and find a common solution” with his European partners after weeks of acrimonious mud-slinging between the two sides.

In a letter sent to Ms Merkel and ECB chief Mario Draghi in anticipation of the talks, the Greek premier chastised the central bank for making it “impossible” for his government to meet its basic obligations to pay wages and pensions.

The ECB has tightened the squeeze on the Leftist government since it came to power in January.

Greek banks are being kept afloat through an expensive form of emergency assistance (ELA) after the ECB removed its ordinary lending operations to the country.

But Mr Draghi shot back at claims the institution was acting unilaterally, claiming any accusations of blackmail were “a bit rich when you look at our exposure to Greece.”

“We haven’t created any rule for Greece, rules were in place and they’ve been applied,” Mr Draghi told an audience of the European Parliament.

Total ECB funding for Greek banks has now topped €100bn, as the ECB has been progressively drip-feeding ELA to the stricken lenders in small increments that have dissatisfied Athens.

 An estimated €1.5bn left the country in the form of deposits last week as bail-out talks reached a nadir. The Greek government estimates it could run out of money by the end of April if a vital €7.2bn in bail-out funds is not released to the country.

But a steadfast Mr Draghi reiterated that the collateral waiver on Greek sovereign bonds would also only be reinstated when the Leftist government had proven its commitment to raising revenues through privatisations and carrying out austerity measures.

Following a red carpet welcome in Berlin, the Mr Tsipras sought to rebuild trust with Europe's largest creditor nation, telling reporters it was not his job to come to come cap in hand to “ask for money to pay next month's salaries from Germany - that is not the institutional process of the European Union.”

 In a press conference dominated by talk of the validity of Nazi war reparations claims, Mr Tsipras dismissed talk of confiscating German buildings in Greece as a form of compensation for the victims of the brutal 1941 occupation at the hands of the Third Reich.

However, he repeated that the question of Second World War debt was a “moral” matter for his country.

"Today's democratic Germany has nothing to do with the Germany of the Third Reich that took such a toll of blood," insisted Mr Tsipras.

Chancellor Merkel however reiterated her stance that that question of further compensation remained firmly closed.

The two sides made little progress on securing Greece’s future in the bloc, with Ms Merkel insisting any questions about Greece’s cash-flow problems remained the terrain of the eurozone’s finance ministers.

“Today we can only discuss, rather than make any promises. I cannot make promises on liquidity for Greece,” she insisted.

Telegraph.co.uk