ATHENS/BERLIN (MNI) – The German Finance Ministry is seriously considering a plan in which Greece would be obliged to ask for a temporary exit from the Eurozone until it sorts out its public finances, senior Eurozone officials told MNI.

The officials said that in the view of German Finance Ministry officials mulling the plan, it is now the most likely scenario. But it is not a done deal. There is strong opposition to such a plan among some key European officials, and no decision is likely at least until the end of the year.

“It is another working scenario which is not new but has emerged in the past month as the most likely outcome for the German finance ministry,” one of the officials said. “There is a team under [German Finance Minister] Wolfgang Schaeuble that believes Greece’s public finances will need many years to return to acceptable levels.”

A second senior official noted that Germany is shifting towards a hawkish approach because of the national elections scheduled for next year. The elections are expected to be held sometime between August 28 and October 27 of 2013, assuming the German government does not step down early.

“It all comes down to the fact that Greece will need a third loan. Even if everyone denies it, we all know it’s unavoidable,” this official said. But because of rising political pressure in Germany and other core Eurozone countries, “this decision will be delayed as much as possible.”

He added that, “the hawkish team of the German finance ministry believes that since Greece will need more money, it would be better given as a bridge loan to facilitate a temporary exit.”

The official noted: “It would be better received politically within Germany, the Netherlands, Finland and other countries like Slovakia and Estonia if the new loan were sold as the final one and tied to a Greek exit from the Eurozone, which would be regarded as punishment.”

German Chancellor Angela Merkel continues to say publicly that she wants Greece to remain in the currency union. She repeated that today in her joint press conference with Greek Prime Minister Antonis Samaras following their meeting in Berlin, though she quickly added that “we of course expect Greece to implement the commitments it made.”

The government in Athens, Merkel said, “can rightly expect that we will make no premature judgements” but will base decisions on fundamental evidence. “That is why we are waiting for the Troika report,” due next month.

Many observers believe domestic politics in Germany will influence Merkel’s thinking more heavily as the election approaches. She is increasingly squeezed not only by a bailout-weary populace but by
members of her own governing coalition who oppose giving any further aid or time to Greece.

“It is all politics from now on since many countries are in election gear,” the second Eurozone official said. “The Greek issue will be resolved mainly on political merits rather than technical and fiscal
ones.”

In the German finance ministry’s scenario, Greece’s temporary exit would be initiated by the Greek government, at least publicly, so that Berlin could avoid being seen as the “villain,” the officials said. This means that once a decision was taken behind closed doors for Greece to leave, Athens would essentially be forced to request the exit — and it would have no choice if it wanted the third loan.

For now, Merkel is pushing Greek Prime Minister Antonis Samaras as hard as possible to meet his government’s commitments, as she did again today.

A high-ranking Greek government official, speaking before Merkel met with Samaras, said the German Chancellor was demanding “imminent results on the privatization and structural reforms path.” He said that
Merkel was “expected to tell Mr. Samaras that ‘this is Greece’s last chance and that time is running out. There is not one single minute to be lost.'”

The Greek official, asked to comment on the voluntary exit scenario, was coy: “It is up to us to avert such a possibility and we will succeed,” he said. “Just remember that we will be listening to a lot of scenarios and views because of the elections.”

The “core” northern Eurozone countries, led by Germany, are expected to ratchet up the pressure on Athens ahead of a very crucial summit of the 27 EU leaders in October, when the Greek situation will be at the top of the agenda. It is then that Samaras is expected to make an official request for a 2-year extension of Greece’s fiscal consolidation program, from 2014 to 2016.

“Germany is backed by Finland, the Netherlands, Slovakia and Estonia as the voluntary exit scenario gains support,” the first Eurozone official said. “But there are moderates in the picture, such as France and Eurogroup president Jean-Claude Juncker, who believe that even a temporary exit will send the Eurozone into a spiral of destruction.”

MNI has learned that Juncker had a series of phone calls with Hollande and Merkel during and after his official visit to Athens on Wednesday, to brief them about his meeting with the Greek prime minister. According to an official who spoke on condition of anonymity, “Merkel was anxious to press Juncker into being very tough on Greece.”

In a separate development, the second Eurozone official said that the 2-year deficit-cutting extension being sought by Greece is something that the EU and IMF “could discuss and decide.”

The condition for such an extension would be “strict implementation of the new program that the Greek authorities will be deciding with the troika inspectors in September,” the official said. “The plan will be tough — but recession is something that no one ignore.”

He noted that in Greece’s current lending agreement “there is a clause in paragraph 4 stipulating that if the country is being stricken by recession, an extension” in the timeframe for deficit cuts “would be discussed.”

The second official said, “if the Greek government delivers on its promises and performs a series of high profile privatizations that could bring the necessary revenues, then the extension could be agreed.”

But both officials made clear that a “voluntary” exit on a temporary basis is still more than a working hypothesis.

The first official said, “all will be decided at the end of the year, after we see how the implementation of the new program is going.”