There is a bug in the integration between Emacs' EasyPG and the "new" GnuPG2 that causes Emacs to not load .gpg files when running in a text terminal.  It's being worked on, apparently, but in the mean-time, here is how to fix it.

The only solution I've found that works is to install a copy of GnuPG1 concurrent with the new GnuPG2.  They can live happily side-by-side.  Once you've done that, you need to tell EasyPG to use the old program rather than the new one. Full details are on the Emacs Wiki, here it is in a nutshell:


If you like to use the gpg agent and graphical pinentry programs and only want to override GnuPG2 with GnuPG1 when running Emacs in a text terminial, then you can put code like this in your Emacs start-up (mine goes in ~/.emacs.d/<username>.el because I use the Emacs Starter Kit):

(when (not (display-graphic-p))
  (setq epg-gpg-program "/usr/bin/gpg1")) ; use GnuPG1 in text terminals