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G7 Bavaria summit: What's on the agenda?

U.S. President Barack Obama and German Chancellor Angela Merkel greet locals dressed in traditional Bavarian folk dress before the two leaders were scheduled to continue to the G7 summit at Schloss Elmau on June 7, 2015 in Kruen, Germany.
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This was going to be German Chancellor Angela Merkel's carefully crafted home summit.

Her team diligently picked the picturesque, remote luxury hotel Castle Elmau in the Bavarian Alps - undoubtedly among the most beautiful spots Germany has to offer to impress its visitors from the G7. There will be no shortage of postcard worthy views.

The topics for the summit too were carefully selected to maybe reflect Merkel's rather non-controversial approach. High on her preferred agenda which she been touting in various domestic media interviews are vocational training for women, investment in research on antibiotic-resistant bacteria and climate change.

What a relaxed summit that would be in the midst of the breathtaking Bavarian Alps if those were the only issues to be discussed.

Unfortunately, the more realistic agenda - at least to the public - looks far more urgent.

While not officially on the agenda, Greece will undoubtedly cause plenty of frustration and potentially even embarrassment for the host. Chancellor Merkel would have loved to present her fellow world leaders a Greek deal to avert bankruptcy. The plan was scuppered by a defiant Greek Prime Minister Alexis Tsipras earlier this week. The search for a deal before the June 30 deadline carries on.

Read MoreJuncker spurns Tsipras meeting

And there is little that G7 leaders can do to spur on those talks except to voice their displeasure at the snail pace of talks. Those discussions are firmly in the hands of the institutions in Brussels and Greek officials. It now seems Merkel will only be meeting with Tsipras and French President Francois Hollande in Brussels next week.

The other hot potato (or should I say knoedel?) is the renewed absence of Russia's President Vladimir Putin who was spectacularly ousted from the G8 club after the annexation of Crimea last year. G8 became G7.

Just in time for the G7 summit, Ukraine's President Petro Poroshenko warned on Wednesday of a possible "full scale invasion" by Russia as fighting in Eastern Ukraine was at its worst since the signing of Minsk 2.

The U.S. might be willing to push for continued and increased sanctions against Russia, but with various European leaders, specifically Italian Prime Minister Matteo Renzi, representing a more dovish stance towards Russia, the U.S. might not find the consensus it is hoping for.

The bottom line is that ironically, both enfants terribles Tsipras and Putin, who might dominate discussions won't be present. Alas, don't expect any tangible results on the most pressing issues facing the world economy, other than the usual 'soft' results: another bonding experience for G7 leaders, some sightseeing for President Barack Obama who will witness Bavarian folklore, and a show of unity for the cameras.

It may just be the rather cozy meeting Merkel was aiming for after all.

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