Merkel heads to Paris for crisis talks after Greek vote

Chancellor under huge pressure as Germany exposed to losses of €82bn

Caught off-guard by news of the Greek referendum, Germany's risk-averse chancellor Angela Merkel adopted an unusually high-risk strategy last week and refused eleventh-hour approaches from Athens until after the snap vote.

As the first results came in last night, the German leader stayed out of sight, but close allies said her trust in the Greek prime minister was now “effectively destroyed”.

With exposure of up to €82 billion, and pressure from bailout critics in Berlin building by the hour, Dr Merkel heads to Paris this afternoon for crisis talks with French president François Hollande.

A No vote would present a political dilemma for the EU’s two largest economies – and Greek creditors – but it could be a personal disaster for Dr Merkel.

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A belated convert to bailout politics, the German leader has bitten her lip throughout the last six months, maintaining an increasingly strained conciliatory tone towards the Tsipras government in recent weeks. The “door always remained open to Greece”, she insisted last week; and “where there is a will, there is a way” back to negotiations.

Pressed last Monday to say whether a Greek No vote meant its EU exit, a pained German leader said: “To be honest, I’m divided.”

Behind the scenes, however, close confidants report that she expresses little will and sees little way to keep working with the Greek prime minister, Alexis Tsipras.

At a closed-door meeting of the inner circle of her Christian Democratic Union (CDU) last week, she reportedly described Mr Tsipras as disrespectful of fundamental European principles with a "harsh and ideological" approach that was "knowingly driving the country against the wall".

‘The rubble woman’

After five years of warning that “if the euro fails,

Europe

fails”, Dr Merkel knows that if

Greece

hits the wall, her European legacy will be part of the collateral damage. In a stark cover, news magazine

Der Spiegel

underlined this point with a chastened Dr Merkel sitting on Greek ruins under the headline “

Die Trümmerfrau

” – the rubble woman.

CDU Bundestag deputy leader Ralf Brinkhaus, the most senior party official to appear in public last night in Berlin, said: “We’ll assess this situation in peace and quiet. We . . . always tried to build bridges; it’s the the Greeks who didn’t cross.”

Before she heads to Paris today, the German leader will take soundings this morning at a meeting of her CDU board to gauge how much tighter her already narrow room to manoeuvre has become.

The most vocal bailout critics in her party, sensing blood in the water, wasted no time in getting out their message last night.

"We've followed every twist and turn of the Greek government and, in a situation such as this, the time has come to say calmly: that's enough," said Wolfgang Bosbach, a long-time CDU bailout sceptic.

With resistance in the CDU parliamentary party growing by the day, a third bailout seems an increasingly unpredictable and untenable political risk for the German leader.

Her only small consolation yesterday was news that the bailout-critical Alternative für Deutschland (AfD) is paralysed by infighting after ousting its founder over the weekend.

The dark mood in the Berlin Bundestag towards Greece is reflected among influential German voices in the European Parliament. Manfred Weber, head of the European People's Party (EPP) grouping, described the vote as a "bad sign for Greece and a jet-black signal for Europe".

No more help likely

Greece’s EU partners were prepared to assist in the coming days should a humanitarian crisis emerge, he said, but the readiness for further assistance was gravely diminished by yesterday’s vote.

“The bigger question,” he told German television, “is to say to the Greeks: ‘We respect how you voted but it’s not just you in the euro zone, there are 18 others.’”

The result puts Dr Merkel’s junior coalition partners, the Social Democratic Party (SPD), in a similarly awkward position. The centre-left SPD has gone back and forth on Greece over the years but, recently has taken a harder line, accusing Syriza leaders of “throwing sand in voters’ eyes for claiming talks can begin on Monday”.

"It was clear it would be tight but this is a very difficult result," said deputy SPD leader Carsten Schneider last night. "Now we have to wait . . . and see what the government in Athens actually wants."

Opposition parties are already turning up the pressure on the German leader and what they view as her uncompromising line on Greece.

“Merkel is not doing what she thinks is best for Europe but what she thinks is best for the CDU,” said Cem Özdemir, Green co-leader last night.

“If she doesn’t put the country and Europe first, I fear the eurosceptics among us will get stronger and, if that happens, then God help us all.”

With calls for debt relief growing in Athens, and outside the EU, German finance minister Wolfgang Schäuble went into damage limitation mode last week, saying German loans to Greece, if written down or lost totally, were a long-term burden that would eventually be restructured.

"This won't bankrupt Germany but €80 billion could renovate all of Germany's infrastructure so, seen that way, it will hurt," said Prof Marcel Fratzscher, head of Berlin's DIW economic think-tank, to ARD public television.

At a Greek restaurant in western Berlin, ironically named Yes! Niko! Yes!, Greek diners were largely satisfied with the vote – despite the uncertainty it brings between their birthplace and adoptive home.

“I would have expected a greater No vote to be honest because we want to be free from this pressure,” said Arasali (51).

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin