Merkel-Schaeuble Differences Over Greece Talks Said to Widen

by Birgit JennenRainer BuerginBrian Parkin

June 8, 2015 — 7:16 PM EEST Updated on June 9, 2015 — 12:40 PM EEST

Bloomberg

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 and is looking instead at a vote of the lower house of parliament on a deal that includes alterations to previous agreements, they said.

“If there are changes, which surely is what we have to assume, then the Bundestag as a whole would have to vote again,” Michael Grosse-Broemer, chief parliamentary whip for the Christian Democratic Union, told reporters in Berlin on Tuesday. “This can’t just be left to the budget committee.”

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.” The Greek delegation in Brussels on Tuesday submitted a three-page proposal to creditors that only covers financial targets in a bid to unlock bailout funds, two international officials with direct knowledge of the discussions said.

Marginal Risk

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.” The Finance Ministry declined to comment on the internal deliberations and referred to statements last week by spokesmen for the two who said they’re working together closely on the crisis.

Many lawmakers in Merkel’s 311-strong parliamentary group made up of the CDU 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.

“All of us who were at the table want Greece to stay in the euro area,” Merkel said Monday after hosting the Group of Seven summit at Schloss Elmau in Bavaria. “There isn’t much time left, that’s the problem.”

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, including the Social Democrats, want time to scrutinize any proposal and therefore would object to a 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.