* Tempers fray after months of repeated abortive talks
* New Greek minister calm at eye of storm
* Germans, French work to contain divisions
* Rift spreads across Europe, including within governments (Adds further comment, detail)
By Alastair Macdonald and Jan Strupczewski
BRUSSELS, July 12 (Reuters) - Caught between the rock of throwing good taxpayers’ money after bad in Greece and the hard place of opening a dangerous crack in their common currency, tempers frayed among euro zone ministers meeting at the weekend.
Such was the “tough, even violent” atmosphere, in the words of one participant, that after an overnight break the German and French finance chiefs, Wolfgang Schaeuble and Michel Sapin, sat down to clear the air between them before resuming on Sunday.
Schaeuble also crossed swords with ECB governor Mario Draghi, snapping at the Italian central banker “I’m not stupid!”
“It was crazy, a kindergarten,” said a source describing the overall course of nine hours of talks on Saturday among weary ministers attending their sixth emergency Eurogroup in three weeks. “Bad emotions have completely taken over.”
Schaeuble and others seemed to favour a “Grexit”, another participant said. The European Central Bank’s Draghi seemed “the strongest European” in the room, most opposed to the risky experiment of cutting Greece loose and braving Schaeuble’s ire by interrupting him during a discussion on Athens’ debt burden.
Unlike many of a dozen previous meetings they have had since Greeks despairing of creditor-imposed austerity elected leftist Prime Minister Alexis Tsipras in January, some of the sharpest exchanges were not with their Greek colleague but each other.
By contrast, Greek Finance Euclid Tsakalotos, appointed last week in place of the often provocative Yanis Varoufakis, seemed calm and expressed a willingness to take steps to convince creditors Athens could be trusted to implement budget and economic reform measures to unlock tens of billions of euros.
At one point a fellow minister turned to Tsakalotos and told him to ignore the rows raging around him: “Don’t worry Euclid,” he said. “It’s not your problem any more, it’s theirs.”
Another participants in the talks said of the Greek: “I don’t know if it’s because he’s tired or just the way he is, but he can really soak up the pressure.”
SCHAEUBLE PLAYS “VAROUFAKIS”
France, which along with the European Commission and ECB is warier than many in Germany of allowing a “Grexit” that could undermine faith in the entire currency, has worked with Greek officials to shape their proposals. With Italy, France shares concerns about Greek promises but is concerned Germany, or at least Schaeuble, is too inflexible, euro zone sources said.
One said that after months of frustration with their former Greek counterpart, some ministers were impatient with Schaeuble: “He’s switched roles with Varoufakis,” the source said.
A Greek official said he feared some in the room had made up their minds to force Athens out of the euro zone. Schaeuble’s ministry drafted a paper saying a “time-out” for a few years was the alternative to much more sweeping reforms, though several sources said Schaeuble did not spell that out at the table.
“Schaeuble’s positions are irresponsible and can bring disaster,” said Gianni Pittella, an ally of Italian Prime Minister Matteo Renzi. Leader of the centre-left bloc in the European Parliament, Pittella spoke at a meeting in Brussels.
That reflects something of a left-right split across Europe.
French President Francois Hollande’s Socialist party issued a comradely appeal to Sigmar Gabriel, the German Social Democrat leader who sits as deputy to conservative Chancellor Angela Merkel in a coalition. It said: “The peoples of Europe do not understand the increasingly hardline position taken by Germany.”
Gabriel, also in Brussels, said he aimed to keep Greece in the euro and stressed that France and Germany, traditionally the twin motors of European integration, would work together.
In Berlin and Paris, officials have played down differences in tone on Greece, stressing that Merkel and Hollande must sell their decisions to different national constituencies.
However, Schaeuble was far from alone in demanding more from Greece and a draft Eurogroup statement, passed to Merkel and the other leaders meeting later on Sunday for endorsement, spells out a long list of measures Athens must take straight away. It also included a specific, German-accented, threat of Grexit.
With its Eurosceptic coalition allies furiously opposed to giving more cash to Greece, the new Finnish government is also pressing for more. Poor, ex-communist states in the east are also finding it hard to justify to their voters why they should pitch in more money for Greeks who are better off than they are.
And in a reflection of annoyance among other states that imposed painful austerity in exchange for help, the Portuguese minister told Tsakalotos that the third bailout he needs - possibly up to 86 billion euros - was bigger than the only one given to Portugal, a source familiar with the talks said.
A nation of similar size, Portugal received a 78-billion euro bailout in 2011. Greece has already had 240 billion euros.
There are also divisions among governments, reflecting the stakes and difficulty of the dilemma.
“The rift in this question runs right through Europe,” Austrian Chancellor Werner Faymann said. “The German finance minister seriously wants to push Greece out of the euro; the German chancellor, on the other hand, is very anxious to find a constructive solution. And it’s like that in many countries.”
And for many of those involved, what is a stake is not money but whether shared aspirations for European unity are better served by applying rules strictly or bending them if need be.
As ministers haggled, Martin Selmayr, the German chief-of-staff to EU Commission head Jean-Claude Juncker, found time to tweet a link to a German TV sketch entitled “Our Precious German Euros”. Two friends work up a frenzy repeating to each other recent media comments about lazy Greeks and thrifty Germans.
The joke is on them. “Something’s at stake that we don’t talk about any more,” runs the satirist’s punchline. “Europe.” (Additional reporting by Francesco Guarascio and Julien Ponthus in Brussels and Georgina Prodhan in Vienna; Writing by Alastair Macdonald; Editing by Giles Elgood and Paul Taylor)