Talks between Chancellor Angela Merkel and International Monetary Fund (IMF) head Christiane Lagarde on Tuesday underscored the differences between Germany and the IMF on dealing with the threat of new financial crisis in Greece.
Speaking at a press conference after the talks, Merkel ruled out again debt relief for Greece.
"Quite simply, in our opinion it is not legally possible (in the eurozone)," the chancellor said.
But Lagarde told reporters that "debt sustainability" was critical to the IMF if the organization is to join the current aid programme for Athens as Greece's troubled finances returned to the international spotlight.
Athens must implement "significant reforms" to ensure IMF aid, Lagarde said.
The talks between Lagarde and Merkel took place during the chancellor's annual meeting in Berlin with the chiefs of the world's top economic institutions.
In addition to Lagarde, Merkel met with World Bank President Jim Yong Kim, the Organization for Economic Co-operation and Development General Secretary Angel Gurria, World Trade Organization head Roberto Azevedo and International Labour Organization chief Guy Ryder.
Merkel met with the economic organizations after the weekend publication of comments by a top IMF official criticizing Europe's failure to agree to cutting Athens' high debt level.
The comments, carried in a report on the whistleblowing website Wikileaks, coincided with media reports of leaked data on offshore bank accounts in Panama implicating thousands of companies, individuals, celebrities and sporting officials around the world.
The OECD chief lashed out at Panama criticizing the nation's reluctance to explain their legal system.
"The world has been moving in another direction: transparency," Gurria said.
The meeting between Merkel and the chiefs of the world's key economic organizations also came against the backdrop of increased uncertainty about the outlook for the global economy following a slowdown in emerging markets and sluggish growth in Europe.
The world was facing "fragile and weak economic growth," Lagarde said, with the global economy confronting a series of risks including the slowdown in China and other major emerging economies, as well as the June vote on whether Britain should exit the European Union.
In a joint communique, Merkel and the leaders of the organizations called for "decisive measures and a new approach mix" to address rising global unemployment and weaker economic growth, insisting governments around the world press on with economic reforms.
But while the meeting was underway in Berlin, officials from the European Central Bank, the IMF, the European Stability Mechanism and the European Commission began a new review of Greece's progress in meeting the bailout commitments to enable it to unlock further loans.
Athens sees the IMF official's comments published by the Wikileaks as signalling the fund's plans to leave the 86-billion-euro (98-billion-dollar) rescue package that Greece hammered out last year to the European Union.
The IMF is waiting for the results of the review of Greece's progress on reforms before it decides whether to join the bailout, which was agreed to in a bid to help Greece stave off bankruptcy and remain a eurozone member state.
Merkel said she told the IMF chief that Germany remained committed to the Washington-based fund being part of an aid package for Athens.
Last year, Merkel moved to rally sceptical members of her conservative Christian Democrat-led political bloc to back the Greek bailout in a parliamentary vote by saying that the IMF will take part in the rescue plan.
"We are on a reasonable way but we are not where we want to be," says Merkel about the steps to overhaul the Greek economy.
Tuesday, April 5, 2016 - 18:08
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