In a major test of her authority, Chancellor Angela Merkel will ask skeptical German lawmakers to back an €86bn ($95.5bn) bailout for Greece on Wednesday despite uncertainty over whether the IMF will play a role in the rescue.
Parliamentary approval is not in doubt because the Social Democrats (SPD) and Greens are expected to back the deal. But the vote could expose a deep divide among Merkel’s conservatives, damaging the German leader and her close ally Volker Kauder, the head of her bloc in parliament.
Kauder, who incensed fellow lawmakers last week with threats of retaliation if they rebelled and voted against a bailout, has described the involvement of the IMF as a “condition” for the support of his party.
However under the bailout approved by euro zone finance ministers at a meeting in Brussels late on Friday, it is unclear whether the IMF will end up playing a role.
IMF Managing Director Christine Lagarde told the ministers by telephone that she could not commit until her board reviewed the situation in the autumn. She renewed a call for “significant” debt relief for Greece, a demand Merkel’s government has repeatedly pushed back against.
German Finance Minister Wolfgang Schaeuble reiterated his opposition to an outright writedown of the face value of Greek debt in an interview with Deutsche Welle published on Saturday. He said the scope for milder forms of debt relief, like extending debt maturities, was “not very big.”
The IMF took part in the first two rescues for Greece, which totalled €240bn, and Berlin is keen to keep it on board because of the Washington-based institution’s reputation for rigour.
Last month, a record 65 lawmakers from Merkel’s conservative camp broke ranks and refused to back negotiations on the bailout.
Far more could rebel in Wednesday’s vote, with top-selling German daily Bild estimating that up to 120 members of her Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), may refuse to back the government.
The Bundestag debate on Greece is scheduled to start at 9am on Wednesday, disrupting Merkel’s travel plans to Brazil.
If 100 or more of her conservative allies rebel in the vote it would be seen as a major political setback for the chancellor, who remains highly popular after 10 years in office.
Senior Merkel allies Ralph Brinkhaus and Eckhardt Rehberg tried to put a positive spin on the Greek deal, noting that Schaeuble had won concessions on privatisations and that the first tranche of aid, at €26bn, would be smaller than initially planned, keeping Athens on a tight leash.
But Bild asked in a full-page spread: “How dangerous is it getting for Merkel?.” The paper said it would be a “political catastrophe” for her should she fail to get a majority of her 311-strong conservative bloc in parliament to back the deal.