“To stabilise the euro, there can no longer be any taboos,” said Philipp Roesler, head of chancellor Angela Merkel’s junior coalition partners, the Free Democrats (FDP).
Roesler, who is also economy minister, added: “That includes, if necessary, an orderly bankruptcy of Greece.”
He was echoed by other senior German politicians in his own party and the ruling Christian Democrats, who are openly discussing a bankruptcy of the Eurozone’s weakest member and its exit from the single currency.
But Greek prime minister George Papandreou yesterday dismissed calls to hold an election. “This is not the time for elections. This is the time for battle,” he said
The Greek government made a snap decision to impose a new €2bn (£1.7bn) property tax to be collected via household bills in a last-ditch effort to meet the country’s 2011 deficit target.
In response, Greece’s paymasters, in the form of the troika – the EU, IMF and European Central Bank (ECB) – will return to the country this week to check it is on target and eligible to receive its next instalment of aid.