After three years of continuous attempts to keep the insolvent Greek state within the eurozone, European Union politicians are showing increasing acceptance of an exit. But while there is now an open debate about Greece leaving the common currency, Germany’s Chancellor Angela Merkel is sticking to her mantra that Athens should stay – a position that fewer and fewer of her colleagues share.

“We want Greece to be part of the euro,” Mrs. Merkel told journalists after a meeting with Greek Prime Minister Antonis Samaras last week in Berlin. “Greece has to meet a number of expectations, but if it does, it can also expect help from us.”

Those words describe Merkel’s dilemma. Mr. Samaras asked for more time to implement conditions linked to financial help from the EU and the International Monetary Fund (IMF). The highly indebted Greek economy is being kept afloat by two international bailout packages worth €240 billion ($300 billion), in return for which Athens has promised to cut spending and reform its ineffective public sector. But unless Samaras has concrete results to show, Merkel cannot promise any more help without meeting stiff resistance in parliament.

What has emerged is a delicate balancing act: While she sent the Greek prime minister home emptyhanded, Merkel has also shown increasing support for intervention from such European institutions as the ECB, thus possibly heading off the prospect of having to confront the unknown consequences of a Greek exit.

Merkel's colleagues, however, have not minced words about their distaste for further help for Greece. “More time [to meet eurozone demands] usually means more money. That’s not an option right now,” said Wolfgang Schäuble, German Finance Minister and member of Merkel’s Christian Democratic Union (CDU).

Martin Lindner, deputy chief whip of coalition partner Free Democrats (FDP), was equally firm: “I can see the problems in Greece are immense. But if they want to talk about the bailout conditions, they have to give us something in return. So far, we only got promises.”

Germany’s economy minister, Free Democrat Philipp Rösler, was one of the first to break the taboo and publicly declare a few weeks ago that a Greek exit from the eurozone was quite possible, and nothing that the currency union couldn’t control. The problem is, no one is really sure that this is the truth, and Merkel clearly does not want to take the risk.

“She is ambitious, but she’s also very careful,” says Margaret Heckel, author of a widely acclaimed Merkel biography. “She does not want to go down in history as the leader who destroyed the euro.”

At least three institutions have working groups researching the consequences of a Greek eurozone exit: one with the European Central Bank (ECB), one in the German finance ministry, and one at the Bundesbank, Germany’s central bank. So far, all three of them have come to the same conclusion: No one knows.

Greece will need help even if it leaves

One thing seems clear, though – Greece will need more help, even if it leaves the euro. If nobody wants to give fresh money, that help could come only in the shape of debt relief from public creditors. Private institutions have already accepted such a so-called haircut of about 75 percent earlier this year. But a haircut of public debt would mean that billions paid by European taxpayers (most of all Germans) would be lost.

“It is not something Merkel can be seen assenting to,” says Sebastian Dullien of the European Council on Foreign Relations. But he notices a kind of quiet agreement between the chancellor and the ECB. Under its new president, Mario Draghi, the European Central Bank has assumed a much more proactive role in the eurocrisis, supporting struggling economies like Spain or Italy by buying large amounts of their state bonds, thus keeping the interest rates for these countries down.

Get the Monitor Stories you care about delivered to your inbox. By signing up, you agree to our Privacy Policy

“Publicly, Merkel is still acting tough,” says Mr. Dullien,”but I think she is quite happy for the ECB to intervene. Many of her party members don’t like it, but of course the ECB is beyond her control.”

Greece’s fate may now hang on a report that the so-called troika of officials from the EU, ECB, and IMF are meant to publish sometime in September, charting the success or lack thereof of the Greek reform process. The next EU summit in October will have to look at the text and decide whether it justifies Greece’s membership in the eurozone.