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posted: 8/13/2012 1:27 PM

Merkel ally: Greece should reform, or leave eurozone

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Associated Press

BERLIN -- A lawmaker from German Chancellor Angela Merkel's party suggested Monday that Greece should voluntarily leave the eurozone if it fails to implement the economic reforms demanded by its creditors.

Michael Fuchs, a senior member of Merkel's Christian Democrats, told daily Handelsblatt that he would prefer if Greece stays in the euro, and noted that Berlin can't force Athens out of the 17-nation currency bloc.

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"But I'm working on the assumption that the Greek government knows what it needs to do if it can't, or won't, meet the reform demands," he was quoted as saying by the paper.

Fuchs, who is part of the pro-business wing of the party, also said Greece must fulfill every single demand agreed with its creditors.

"Even if the glass is half full, that isn't enough for a new aid package," he said.

With the chancellor on holiday, lawmakers from Merkel's center-right coalition have used the summer recess to snipe at further bailout demands for ailing southern European nations like Greece and Spain.

Fuchs said Germany's Parliament wouldn't accept giving the proposed new European Stability Mechanism bailout fund a banking license so it can borrow money directly from the European Central Bank.

"If the ESM were equipped with a banking license then it could refinance itself at the ECB without any control or legitimization by national parliaments," he was quoted as saying in Handelsblatt.

Germany's top court is expected to rule on a complaint against the ESM by Sept. 12.

On Monday, a group of German euro critics led by Berlin economic professor Markus Kerber said it had submitted an urgent request to the Federal Constitutional Court asking it to delay its decision further.

Kerber argues that the European Court of Justice in Luxembourg needs to rule on a separate complaint before the German court can reach its decision.

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