German Chancellor Angela Merkel tried to reassure sceptical lawmakers on Sunday (16 August), before a parliamentary vote in which members of her conservative faction may reject the rescue.
Merkel rescheduled trips to Italy and Brazil to dissuade potential rebels from voting against the bailout in the Bundestag on Wednesday (19 August).
Appearing on public broadcaster ZDF on Sunday (16 August), she said that Greek Prime Minister Alexis Tsipras had changed his approach after a confrontation with creditors. She also said that the International Monetary Fund would take part in a new bailout for Greece.
In her first public comments since her summer break, Merkel told ZDF that she was sure IMF head Christine Lagarde would ensure the participation of the fund if conditions on Greek pension reform and debt relief were met.
“Mrs. Lagarde, the chief of the IMF, made very clear that if these conditions are met, then she will recommend to the IMF board that the IMF takes part in the programme from October,” Merkel said. “I have no doubts that what Mrs. Lagarde said will become reality.”
Uncertainty over the IMF’s role in the €86 billion bailout has become a headache for Merkel before Wednesday’s vote. Lawmakers from her Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), want the IMF involved because of its reputation for rigour.
Volker Kauder, a close Merkel ally and the leader of her conservative faction in parliament, has even described IMF involvement as a “condition” for supporting a new bailout.
But Lagarde, who has been pressing eurozone countries to provide Athens with “significant” debt relief, has said the IMF will wait until October to decide whether to participate. That would force lawmakers to vote without any guarantees that the Washington-based institution will have a role.
In a nod to its calls for debt relief, Merkel said there was room to ease the burden on Greece by extending the maturities on its debt and reducing interest rates.
German approval of the bailout is not in doubt, because of the support of parties like the Social Democrats and Greens. But a rebellion by a large number of her allies would be a blow for Merkel, who remains highly popular after 10 years in office.
Last month, a record 65 lawmakers from Merkel’s conservative camp broke ranks and refused to back negotiations on the bailout. German tabloid Bild estimated over the weekend that up to 120 CDU and CSU members may refuse to back the government in the vote on Wednesday.
In the interview, Merkel rejected the notion that Germany had driven too hard a bargain with Greece, or that Berlin had been isolated in the talks on a third bailout.
“It doesn’t help if we are all nice with each other now, only to have a situation in two to three years where we are worse off than today. The euro crisis has already lasted too long,” she said.
Asked whether Berlin was striving for a “German Europe”, Merkel said: “We don’t want this.”
Eurozone finance ministers agreed last week (14 August) to lend Greece up to €86 billion in return for an unprecedented package of reforms that Athens had previously rejected and which has divided Prime Minister Alexis Tsipras and his party.
Assuming approval by the German and other parliaments, €13 billion should be in Athens next Thursday to pay pressing bills and a further 10 billion will be set aside at the European Stability Mechanism, earmarked to bolster Greek banks' capital.
In all, the eurozone will lend €26 billion in a first tranche of the bailout before reviewing Greece's compliance with their conditions in October.