G-7 summit nears, but German hosts have other worries

As President Obama and other G-7 leaders gather this week at an exclusive Alpine spa in southern Bavaria, the German hosts could be more focused on an item not on the agenda and a leader no longer on the guest list.

For Angela Merkel, solving the Greek debt crisis and re-establishing a working relationship with excluded Russian leader Vladimir Putin may derail her other G-7 priorities as she prepares to host her second summit as chancellor starting Sunday.

Moscow’s absence from the summit has also been a point of contention for many in Germany. Since its annexation of the Crimean peninsula and buildup of forces along the Ukrainian border, Russia has been removed from the former G-8 and Russian President Vladimir Putin was not invited to this year’s gathering. In immediate response to the annexation, the G-8 summit in Sochi was canceled last year and the scaled-back group of G-7 countries met in Brussels.

Last month, Ms. Merkel said that readmitting Russia to the group would be unthinkable without progress in the Ukraine. “As long as Russia does not commit itself, and act according to, the fundamental values of international law, a return to the G-8 format is unimaginable for us,” she said.

But many Germans are skeptical that a policy of isolating Moscow can work in the long run or is the best way to deal with the host of problems before the developed world. On Sunday, German business lobbies called for Russia’s attendance at the summit. Eckhard Cordes, chairman of Germany’s Committee on Eastern Economic Relations, argued that keeping Moscow out of the talks ruled out the possibility of dialogue.

“A G-7 meeting with Russia could contribute to solving crises and stir Russia into constructive steps in the Ukraine conflict,” Mr. Cordes told the conservative German newspaper Die Welt. He also added that it is better for leaders to talk to each other than to talk about each other.

German-Russian Forum President Matthias Platzeck also believes that it is time to allow Mr. Putin attend the summit, saying that Russia’s assistance in dealing with matters of international stability and security was invaluable. “The process of disintegration in the Middle East, in Iran, Afghanistan and Syria can only be solved with Russia,” he told Die Welt.

German public opinion is also split on how to deal with Russia. According to May 2015 Pew polling on U.S.-German relations, while a majority of Germans (57 percent) would prefer closer ties with the United States over Russia, 15 percent said they would prefer closer ties with Russia, a difference still largely defined by the country’s former East-West split. The same polling revealed that East Germans were nearly twice as likely as West Germans to believe that the European Union’s approach to reprimanding Russia for the annexation of Crimea is “too tough.”

Also of pressing interest to Ms. Merkel and the other European leaders at the summit is the ongoing financial crisis in Greece, which, after years of austerity measures and the election of a new far-left government, is still struggling to find a way to repay its massive debts.

Currently at a meeting of finance ministers and central bank directors from around the globe in Dresden Germany, the issue of Greek debt is once again dominating talks. Athens has been working with creditors such as France and Germany to strike a deal before its massive payments to the International Monetary Fund are due.

U.S. officials have been unusually outspoken in urging Greece and its creditors to reach a compromise and avoid a default or the exit of Greece from the bloc of countries that use the euro. Ms. Merkel is widely seen as taking a tough line that Athens must pay its debts and not be given extensive relief.

Even though most of its debt isn’t currently held in commercial banks, a bankrupt Athens could create problems for the global economy, said U.S. Treasury Secretary Jack Lew. “There is great uncertainty in there at a time when the world needs greater stability and certainty,” Mr. Lew told reporters.

While he said that a deal was possible by the end of the week, German EU Commissioner Guenter Oettinger cautioned that “Greece’s challenges are too big to be solved ’en passant.’”

The G-7 summit will take place at Schloss Elmau, an alpine resort in Bavaria, just 60 miles south of Munich, where protests against the summit are already happening. German press outlets are reporting that groups opposed to the summit are already demonstrating on Munich’s Marienplatz. A large concert urging the summit to address global poverty is scheduled for this Saturday on the Koenigsplatz in the same city.