US and Germany at odds over arms to Ukraine

He declined to draw a red line for Russia to cross before he sends arms.

He underlined that “a decision has not yet been made”.

He also noted that given the strength of the Russian military and the length of the Russian-Ukrainian border, there is little chance Ukraine could defeat Russia if Putin is “determined” to escalate.

But he said weapons, along with economic sanctions, would “raise the costs” for Moscow.

“It’s not based on the idea that Ukraine could defeat a Russian army that was determined. It is rather to see whether or not there are additional things we can do to help Ukraine bolster its defenses in the face of separatist aggression”.

He added that even if the US and EU have “tactical disagreements”, the trans-Atlantic partners remain “completely unified”.

For her part, Merkel repeated that she is against arms exports: "I’ve always said I don’t see a military solution to this conflict".

But she added: “As to the export of arms, I have given you my opinion. You may rest assured that no matter what we decide, the alliance between the United States and Europe will continue to stand, will continue to be solid, even though on certain issues we may not always agree.”

She downplayed expectations the summit in Minsk on Wednesday - with France, Germany, Russia, and Ukraine - will yield results.

She also said that “if, at a certain point in time, one has to say that [diplomatic] success is not possible even if one puts every effort into it” then the EU and US should impose further economic sanctions.

Looking at the example of Iran, she added: “For a fairly long period of time we have had sanctions in place there; people don't seem to question them. And I think they have been fairly successful, if we look at the current state of affairs with the negotiations on the nuclear programme”.

Greece

The two leaders also spoke about how to handle the new, far-left government in Greece.

Obama said he is keen for Athens “to find a way that returns Greece to sustainable growth within the eurozone”.

Merkel noted she is waiting for Greece to “come with a sustainable proposal”, either at a meeting of euro-using countries’ finance ministers in Brussels on Wednesday, “or, perhaps, a few days later”.

She said she also wants Greece to stay in the euro.

But she noted the new government has to show “solidarity” and “quid pro quo” with its creditors. She added that the austerity measures imposed by the troika - the group which represents its lenders and which is hated in Greece - should form “the basis of any discussion we have”.

She also noted that Ireland and Portugal, which underwent austerity in return for bailouts, “are now back on the growth path”.

Politics vs. geopolitics

A French-based Greek analyst, Michel Koutouzis, told EUobserver that Germany and the US see Greece from different points of view.

He noted that German politicians and society, following Germany’s economic crisis prior to World War II, associate profligacy with instability.

But he said the US is worried that if Greece, a Nato member, defaults, or seeks a Russian bailout, it would harm security on Nato’s southern flank.

“The principal cause of war in Germany was inflation … so for them this is not an economic concept, it’s a political concept. But the Americans are looking at it from a geopolitical perspective”.