Germany hardens line on Greece after talks collapse

By Andreas Rinke and Holger Hansen BERLIN (Reuters) - German politicians from across the political spectrum backed Chancellor Angela Merkel's firm line in aid talks with Athens on Monday despite the growing risk of a Greek default that could push it out of the euro zone. A day after negotiations between Greece and its euro zone creditors broke down, members of Merkel's conservative party accused Athens of losing touch with reality. But some of the toughest rhetoric came from her left-wing coalition partners, the Social Democrats (SPD), who have traditionally favoured a softer line with Greece. The reaction reduces the chances that Merkel might flinch and make eleventh-hour concessions as the standoff with Greece enters a critical phase. Without a deal in the coming days, a default will begin to look inevitable. "In our view, the Greek government is behaving increasingly irresponsibly, including towards its own country," said Yasmin Fahimi, general secretary of the SPD and a politician who has not shied away from criticising the government in the past. "Solidarity is not a one-way street," she added. "It is clear that we will not allow ourselves to be blackmailed." Volker Kauder, leader of Merkel's conservative bloc in parliament, said the government's goal remained to keep Greece in the euro zone. "But it won't work that Greece sets the terms and says 'everyone else has to dance to our tune'. Greece needs to get back to reality," Kauder said. Conservative lawmakers who spoke to Reuters on condition of anonymity said that although there was a general consensus that a Greek exit from the euro zone should be avoided, there was also a firm belief that concessions to Athens could create problems for other governments like Spain and Portugal. One lawmaker said bending to the wishes of Greece's ruling Syriza party would be a signal to Spanish voters to back the left-wing protest party Podemos in elections later this year. Even Claudia Roth of the Greens party said the Greek government had to move, saying in an interview on Deutschlandfunk radio that it could make more savings in defence. RUNNING OUT OF TIME Greece, for its part, has been trying to bypass its creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- by urging Merkel and other leaders to strike a "political deal" to unlock aid. But Merkel signalled at a closed-door meeting of conservative party leaders on Monday that no further negotiations could take place until Athens and the creditors had reached a deal on the reforms needed for the aid to flow. That means that there is little chance that euro zone finance ministers can break the deadlock at their meeting in Luxembourg on Thursday, unless a deal with the creditors is clinched before then. Time is running short. Even if Greece were to clinch a deal in the coming days, it would have to be approved by euro zone finance minister, the Greek parliament and several European parliaments, including the Bundestag. All these steps must be completed by June 30 to avoid the risk of Athens defaulting on loans it received from the IMF. The Bundestag lower house is in session this week, and again in the week of June 29-July 3 before breaking up for the summer recess. Michael Fuchs, a senior CDU lawmaker, described Greek Prime Minister Alexis Tsipras and his Finance Minister Yannis Varoufakis as unprofessional and appeared to have accepted the idea that German taxpayers may take a hit on the loans to Athens. "The danger that we'll have to write off part of the loans is quite considerable," he said. The warnings from Merkel's conservatives were echoed by SPD leader Sigmar Gabriel, who warned in a column for Bild newspaper on Monday that patience with Greece was wearing thin. Gabriel has until now been generally sympathetic to Greece's plight. An opinion poll on Friday showed a sharp increase in the number of Germans who want Greece to leave the euro zone. A narrow majority of 51 percent favour a "Grexit" according to the survey for ZDF television, while 70 percent are opposed to any more concessions for Athens. (Writing by Paul Carrel; Editing by Noah Barkin and Giles Elgood)