UPDATE 4-G7 leaders bid "Auf Wiedersehen" to carbon fuels
* Merkel says not much time for Greece deal
* Leaders take firm line with Russia on Ukraine crisis
* Merkel says G7 could strengthen sanctions if needed (Add Breakingviews link)
By Paul Carrel and Michelle Martin
KRUEN, Germany, June 8 (Reuters) - Leaders of the world's major industrial democracies resolved on Monday to wean their energy-hungry economies off carbon fuels, marking a major step in the battle against global warming that raises the chances of a U.N. climate deal later this year.
The Group of Seven's energy pledge capped a successful summit for host Angela Merkel, who revived her credentials as a "climate chancellor" and strengthened Germany's friendship with the United States at the meeting in a Bavarian resort.
Ties between the Cold War allies have been strained in the last couple of years by spying rows but Merkel appeared to put that behind her on welcoming U.S. President Barack Obama, who declared their countries were "inseparable allies."
Meeting in the picturesque Schloss Elmau at the foot of Germany's highest mountain, the Zugspitze, the G7 leaders pressed Greece to accept painful economic reforms to resolve its debt crisis and struck a firm tone on Russia's role in Ukraine.
They agreed that existing sanctions against Russia would remain in place until Moscow and Russian-backed rebels in eastern Ukraine fully respect a ceasefire negotiated in Minsk in February, and said they could escalate sanctions if needed. Continued...