August 13, 2012 / 8:39 AM / 5 years ago

Senior Merkel ally sends stark warning to Greece

European Central Bank's (ECB) Klaus Masuch (L) and European Commission Director Matthias Mors arrive at the Greek Finance ministry to participate at a meeting in Athens August 2, 2012.Yorgos Karahalis

BERLIN (Reuters) - A senior member of Chancellor Angela Merkel's party issued a stark warning to Greece on Monday, saying Germany would not hesitate to veto further aid to the country if there were any signs it was not meeting the conditions of its bailout.

The comments, by the deputy parliamentary leader of Merkel's Christian Democrats (CDU) Michael Fuchs, are a sign that frustration with Greece among ruling party lawmakers is nearing the breaking point.

The "troika" of the European Commission, the European Central Bank and the International Monetary Fund is due to decide on the disbursement of the next tranche of money from Greece's 130 billion euro bailout package in September.

"Even if the glass is half full, that won't be sufficient for a new aid package. Germany cannot and will not agree to that," Michael Fuchs told German newspaper Handelsblatt.

"We long ago reached the point where the Greeks must show they are capable of delivering a shift. A policy of the last, last, last chance won't work anymore and must come to an end."

Merkel has suggested in the past that cutting off aid to Athens, a step which would likely push it out of the euro zone, carries too many risks for the bloc.

But she returns from her summer holidays this week under growing pressure from conservative allies to draw a line in the sand, regardless of the consequences.

In recent weeks, senior members of Merkel's coalition partners - the Christian Social Union (CSU) and Free Democrats (FDP) - have said a Greek exit from the euro zone would be tolerable. One predicted it would leave the currency zone by the end of this year.

Fuchs said Germany had reached its limit with Greece and would not hesitate to veto more aid if lawmakers were convinced it was not fulfilling the conditions of its bailout.

Were that to happen, he suggested that a Greek exit from the euro zone would be inevitable. Fuchs said Greece could remain a member of the European Union after a possible exit and receive a form of Marshall Plan to help it as it returns to its own currency.

Reporting by Michelle Martin; Editing by Noah Barkin

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