Merkel Said to Plan Address for Greece If Deal Reached

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How Close Is Greece to Sealing a Deal?

German Chancellor Angela Merkel is considering delivering a keynote address to make the case for aiding Greece as she faces down a potential revolt from as much as a third of her bloc’s lawmakers.

Merkel would hold the speech after Greece and its creditors agree on a deal with conditions she deems strong enough to sell to parliament and the German public, according to two government officials. She would argue that a Greek exit from the euro area would risk causing geopolitical instability in the region, said the officials, who asked not to be identified because the discussions are private.

Merkel’s desire to keep Greece in the euro is fraught with political risk given the level of exasperation in Germany with Prime Minister Alexis Tsipras after four months of brinkmanship. While some German policy makers have hardened their stance against helping Greece, others are hinting at more flexibility to avert a financial collapse.

“Should we seriously go and prescribe in detail what the Greeks are allowed to spend and what revenue they can have?” Deputy Finance Minister Thomas Steffen said in an interview. “I say no. It’s the rough framework that has to be clear.

Caucus leaders of Merkel’s party are working on the objectors, telling them they may be asked to approve further aid to ward off a default even if Greece refuses to implement all changes demanded by creditors, according to three other party officials. Merkel has been calling small groups of dissenters to the chancellery to tell them that, one of the people said. All the officials asked not to be identified because the discussions are private.

Scaling Back

Merkel’s bid to rally her party bloc behind further aid reflects her view that giving up on Greece would be a broader setback for European unity and influence. While she has backed bailouts since Europe’s debt crisis spread from Greece in 2010, this may be her biggest test of persuasion yet.

As European officials warn that time is running out for Greece’s finances, Merkel and French President Francois Hollande met in Berlin on Tuesday and pressed Tsipras to agree by May 31 on the conditions to unlock financial aid. A deal with Greece may comprise as little as a third of the country’s previous commitments for economic policy changes, said another German government official who asked not to be identified.

Greece’s government still hasn’t recognized what it needs to do to end the impasse, a party official quoted German Finance Minister Wolfgang Schaeuble as telling lawmakers from Merkel’s Christian Democrat-led bloc at their weekly closed caucus meeting in Berlin on Tuesday.

The chancellery declined to comment on Merkel’s plans and on the government’s discussions with lawmakers about Greece.

Any substantial changes to the conditions for Greece’s 240 billion-euro ($271 billion) aid program need approval by the full German lower house, or Bundestag. As many as 100 of Merkel’s 311 lawmakers may still be holdouts, one of the officials said. Even so, Merkel has won Bundestag backing for all bailouts since Europe’s debt crisis spread from Greece in 2010, partly with the support of coalition partners and the opposition Greens. Her coalition controls 504 of the Bundestag’s 631 seats.

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