A split between German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble is widening over Greece as the funding standoff goes down to the wire, said people familiar with the matter.
Merkel is ready to make concessions to keep Greece in the euro because of geopolitical concerns, while Schaeuble is willing to let the country exit the euro unless its government takes measures to ensure the country’s long-term survival in the monetary union, said the people, who asked not be identified speaking about internal party discussions.
That divide is also reflected in Merkel’s parliamentary caucus, which is increasingly uneasy with letting the 41-member budget committee decide on disbursing any aid to Greece and is looking instead at a vote of the lower house of parliament on a deal that includes changes to previous agreements, they said. The Finance Ministry declined to comment on the internal deliberations and referred to a statement last week by spokesmen for Merkel and Schaeuble said the two are working closely on the crisis.
Greece is deadlocked with creditors over the conclusion of a multi-year bailout program expiring at the end of the month, with Prime Minister Alexis Tsipras calling the latest offer “a bad negotiating trick” in talks that place “clearly unrealistic” demands on the euro region’s most indebted member. While Merkel has repeatedly said she’ll keep working to allow Greece to stay in the euro area, Schaeuble has emphasized that the contagion risk from the country possibly exiting the bloc is “marginal.”
Many lawmakers in Merkel’s 311-strong caucus made up of the Christian Democratic Union and Bavarian Christian Social Union are finding it difficult to support the chancellor’s position and would side with Schaeuble if forced to choose, the people said.
Some within her caucus are discussing whether Merkel would need to tie any decision on the bailout program to a confidence vote to rally lawmakers behind her, one of the people said. Any agreement that doesn’t spell out binding reform obligations wouldn’t be accepted even among those siding with Merkel, the people said.
Lawmakers from all coalition parties, which also includes the Social Democrats, object to a possible last-minute vote in Germany’s lower house of parliament at the end of the month, the last week the Bundestag is in session before the summer break, one person said. Lawmakers want time to scrutinize any proposal put before them and not be pressured to make a hasty decision, the person said.