By Gabriele Steinhauser
RIGA--The eurozone's patience with Greece is running thin and
long-held taboos are starting to crumble.
European officials said over the weekend that at a meeting of
the bloc's finance chiefs, a small band of ministers suggested the
once unthinkable: discussing a "Plan B" in the event that talks on
continued financing for Greece fail.
The idea, raised by ministers from Slovenia, Slovakia and
Lithuania, was quickly rejected by the group's chairman, Dutch
Finance Minister Jeroen Dijsselbloem, according to officials
present at or briefed on the Friday meeting. But their push into
one of the remaining no-go areas after five years of debt crisis
shows the extent to which many of the eurozone's decision makers no
longer believe a deal on new bailout aid for the government in
Athens can be sealed before the old one expires at the end of
June.
"What my discussion was about is what we will do if...the new
program will not be achieved in time for Greece to be able to
finance itself and improve liquidity," Slovenia's Dusan Mramor
said.
Negotiations on a list of overhauls and spending cuts that
Athens must implement in return for sustained aid have barely
gotten off the ground since February. And the government of Prime
Minister Alexis Tsipras now looks set to blow through an
end-of-April deadline to get agreement on the new measures.
With time running out, Mr. Tsipras held phone calls with German
Chancellor Angela Merkel and Mr. Dijsselbloem on Sunday to discuss
speeding up the negotiations, a senior Greek official said.
The official added that representatives from Greece and the
country's creditors--a team also known as Brussels Group--would
convene via teleconference Monday.
The prospect of not reaching a deal in time, though, is putting
policy makers in an uncomfortable spot: preparing for the default
on a EUR317 billion ($345 billion) mountain of debt that is mostly
in the hands of their governments, and a potential exit of Greece
from the common currency. Since 2010, eurozone governments have
lent Greece more than EUR180 billion, a figure that doesn't include
their contribution to the International Monetary Fund's loans or
their central banks' growing exposure to their Greek
counterpart.
Until now, contingency planning has happened in secret, with
governments and institutions drawing up their own scenarios without
much coordination or communication--even though an effective
response would clearly require both.
Any indication that such documents were moving from drawers in
national finance ministries onto the common negotiation table could
easily trigger a chain reaction leading to an unwanted outcome.
Germany's finance minister, Wolfgang Schäuble, explained that
dilemma Saturday, when he was asked about his own country's
contingency planning.
"Of course there's sufficient fantasy to imagine what kinds of
things could happen" if no deal on Greece's bailout can be reached,
Mr. Schäuble told journalists. "But if...any responsible politician
were to answer this question with 'yes,' we know what would happen.
If he answered it with 'no'...then we know that you won't believe
me."
Germany's most detailed plans for a Greek default on the
eurozone stem from 2012, when two rounds of national elections
risked leaving the country without a functioning government. At the
time, Berlin, the European Central Bank and the European Commission
drafted a meticulous road map for returning Greece to the drachma,
ranging from Greece's emergency financing needs to the logistics of
introducing new notes and coins, officials familiar with the plans
said at the time.
That proposal would still form the basis of any 2015 reaction
plan. But this time around, policy makers are also considering
options in which Greece would default but remain in the currency
union.
Behind the scenes, pressure is building on the government in
Athens to start thinking about capital controls that could break a
sudden acceleration of deposit outflows from its banks, according
to officials familiar with the negotiations between Greece and the
institutions overseeing its bailout.
"A Plan B can be anything," Slovakia's Mr. Mramor said.
The growing willingness to talk about contingency plans shows
how little the two sides have converged since Greece's left-wing
government was elected in late January. At Friday's meeting, this
led to clashes between Greek Finance Minister Yanis Varoufakis and
representatives of countries that don't usually take the lead in
bailout negotiations.
When Mr. Varoufakis set out plans to introduce an extra monthly
pension payment for the poorest retirees, he was attacked by
Slovakia's Peter Kazimir, who just last week fought off a similar
initiative in his own country, according to an official
present.
The push for Plan B discussions came from three countries that
all spend less on social security than Greece. And the finance
ministers of France and Italy--two states that have traditionally
taken a softer line of austerity policies--also pressured Mr.
Varoufakis to agree to the conditions of the current EUR240 billion
bailout.
"Germany didn't have to speak so much, because the others did
the work," said an official briefed on the talks.
Yet it was Mr. Schäuble who indicated how quickly even the
loosest Plan B can turn into Plan A--by likening preparations for a
potential Greek default to the reunification of Germany, a process
that began with the fall of the Berlin Wall in 1989.
"If I had said in advance that we had a plan for reunification,
everyone would have said the Germans have gone completely mad," Mr.
Schäuble said. The former German Democratic Republic adopted the
deutsche mark, Germany's currency before the introduction of the
euro, in 1990.
Marcus Walker and Viktoria Dendrinou contributed to this
article.
Write to Gabriele Steinhauser at
gabriele.steinhauser@wsj.com