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just before Ms Merkel agreed to meet Mr Tsipras on the sidelines of an EU summit last Thursday and invited him for a one-on-one session in Berlin

Mr Tsipras warns that his government will be forced to choose between paying off loans, owed primarily to the International Monetary Fund, or continue social spending.

He blames European Central Bank limits

“Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations during the spring and summer . . . it ought to be clear that the ECB’s special restrictions when combined with disbursement delays would make it impossible for any government to service its debt,” Mr Tsipras wrote.

He said servicing the debts would lead to a “sharp deterioration in the already depressed Greek social economy

Mr Tsipras was rebuffed in efforts to secure quick financing from either the ECB or eurozone lenders at Thursday’s Brussels meeting

In an interview, Luis de Guindos, Spanish finance minister, said his eurozone counterparts would not sign off on any new bailout funding until a full set of approved reforms was passed

Mr Tsipras’s five-page letter is particularly critical of the ECB

The Greek prime minister insisted the ECB should have returned to “the terms of finance of the Greek banks”

Far from going easier on Athens, the ECB is considering whether to give its guidance to Greek banks more authority by making it a legally binding requirement not to add to their T-bill holdings.

He also criticised the ECB for only increasing the amount of emergency central bank loans to Greek lenders “at shorter intervals than normal and at rather small increments”

Mr Tsipras wrote that Athens was “committed to fulfilling its obligations in good faith and close co-operation with its partners”, he also warned Ms Merkel that a failure to find short-term funding could lead to much bigger problems.

He said the lack of reforms "raises the threat of an exit (from the euro) whose consequences would ultimately hit all members"

He said an economic union would make markets more confident about future growth prospects -- essential for reducing high debt levels -- and so less likely to react negatively to setbacks such as a temporary increase in budget deficits.

Unifying capital markets to follow this year's banking union would also make the bloc more resilient.

Second, after a period of alignment, the monetary policies of these three large and systemically important economies are diverging, taking the world economy from a multi-speed trajectory to a multi-track one.

First, the United States is consistently outperforming Europe and Japan in terms of economic growth and dynamism – and will likely continue to do so – owing not only to its economic flexibility and entrepreneurial energy, but also to its more decisive policy action since the start of the global financial crisis.

With higher US market interest rates attracting additional capital inflows and pushing the dollar even higher, the currency’s revaluation would appear to be just what the doctor ordered when it comes to catalysing a long-awaited global rebalancing – one that promotes stronger growth and mitigates deflation risk in Europe and Japan.

ECB President Mario Draghi signalled a willingness to expand his institution’s balance sheet by a massive €1 trillion ($1.25 trillion).

Furthermore, sudden large currency moves tend to translate into financial-market instability.

There is also the risk that, given the role of the ECB and the Bank of Japan in shaping their currencies’ performance, such a shift could be characterized as a “currency war” in the US Congress, prompting a retaliatory policy response.

Today, many of these countries have adopted more flexible exchange-rate regimes, and quite a few retain adequate reserve holdings.

an appreciating dollar improves the price competitiveness of European and Japanese companies in the US and other markets

But a new issue risks bringing about a similarly problematic outcome: By repeatedly repressing financial-market volatility over the last few years, central-bank policies have inadvertently encouraged excessive risk-taking, which has pushed many financial-asset prices higher than economic fundamentals warrant.

This is not to say that the currency re-alignment that is currently underway is necessarily a problematic development; on the contrary, it has the potential to boost the global economy by supporting the recovery of some of its most challenged components. But the only way to take advantage of the re-alignment’s benefits, without experiencing serious economic disruptions and financial-market volatility, is to introduce complementary growth-enhancing policy adjustments, such as accelerating structural reforms, balancing aggregate demand, and reducing or eliminating debt overhangs.

The US dollar’s resurgence, while promising, is only a first step. It is up to governments to ensure that the ongoing currency re-alignment supports a balanced, stable, and sustainable economic recovery. Otherwise, they may find themselves again in the unpleasant business of mitigating financial instability.