Merkel to Hold Emergency Talks With German Politicians on Greece

Updated on
European Leaders Meet As Race For Greek Bailout Nears End

German Chancellor Angela Merkel is set to meet domestic political leaders.

Jasper Juinen/Bloomberg *** Local Caption *** Angela Merkel

Chancellor Angela Merkel and top German politicians will hold emergency talks to discuss Greece’s financial crisis as preparations get under way to cope with the consequences of a possible exit from the euro.

Merkel, who remained silent Sunday, will meet with party chiefs and parliamentary caucus leaders in Berlin on Monday afternoon, and then brief reporters, said Steffen Seibert, her chief spokesman. Vice Chancellor Sigmar Gabriel told broadcaster ZDF that the European Union is facing its biggest crisis since the establishment of its predecessor organization in the late 1950s under the Treaty of Rome.

Merkel spoke by phone with U.S. President Barack Obama on Sunday and the two leaders agreed it’s critically important to make every effort to return to a path that will allow Greece to stay in the euro, the White House said in a statement. The call was one of a flurry of discussions Sunday after Greek Prime Minister Alexis Tsipras over the weekend rejected the creditors’ conditions for aid and called a July 5 referendum on the proposals.

“Mr. Tsipras wants to accept all these offers only if Europe doesn’t link them to any conditions for reforms in Greece,” Gabriel, chairman of the Social Democratic Party, Merkel’s coalition ally, said in an interview with newspaper Sueddeutsche Zeitung. “Europe won’t be able to accept this even after a referendum.”

Gabriel canceled a scheduled trip to Israel set to begin Sunday to deal with the unfolding crisis, Deutsche Presse Agentur reported.

Well Equipped

Group of Seven finance ministry deputies discussed how the euro region would contain a possible Greek default, said German officials, who asked not to be identified because the talks were private. Finance Minister Wolfgang Schaeuble also briefed senior lawmakers on the latest developments, officials said.

“The euro zone is now well equipped to ensure that the reckless actions of a government won’t damage the stability of the currency area as a whole,” Eckhardt Rehberg, budget spokesman for Merkel’s CDU bloc in parliament, said in an e-mailed statement. “The door for further talks is and remains open. But we can’t accept any behavior that undermines the long-term foundation of the euro zone.”

Euro-region finance chiefs on Saturday turned down Tsipras’s request to extend the country’s aid program to allow the referendum to take place, and instead started making preparations to contain the fallout of an exit from the euro. The European Central Bank said on Sunday it will freeze the emergency aid to Greece’s financial system.

Bring Cash

Even so, tourists visiting Greece should bring sufficient cash as automated teller machines may run out of bank notes, Germany’s foreign office said in a travel advisory on its website. Greece, moving to avert the collapse of its financial system, plans to shut lenders Monday after the ECB’s decision, said Piraeus Bank SA Chief Executive Officer Anthimos Thomopoulos.

Foreign Minister Frank-Walter Steinmeier said on ARD German public television he’s “dismayed” by recent steps taken by the Greek government “and especially on the part of the prime minister.”

German public coffers face losses of at least 80 billion euros ($89.3 billion) in the event of a Greek default, Christian Democrat lawmaker and European Affairs Committee chairman Gunter Krichbaum told the Leipziger Volkszeitung newspaper. The lower house of parliament may have to meet during summer recess to vote on measures related to Greece such as humanitarian aid, he said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE