Germany's Angela Merkel has played down the chances of a Greek exit from the Euro zone, but made clear she expected Athens to stick to the terms of its international bailouts after this month's election.
The chancellor addressed the issue for the first time since a German magazine said at the weekend her government had shifted its stance and was ready to accept a Grexit if Athens failed to meet its commitments under EU/IMF rescue packages totaling 240 billion Euros.
The leader of the left-wing Syriza party, Alexis Tsipras, has pledged to reverse reforms and secure debt forgiveness from Greece's partners if he wins the election. Syriza currently holds a narrow lead over the centre-right New Democracy party of Prime Minister Antonis Samaras.
I as German chancellor, and also the German government, have always pursued a policy of Greece staying in the euro zone, Merkel told a joint news conference with British Prime Minister David Cameron.
She said she had no doubts whatsoever that the Greek situation would be brought to a successful conclusion, but stressed Athens needed to continue to respect its commitments if it wanted its partners to show solidarity.
German officials admitted that various scenarios, including a possible Greek exit, were being examined by technical experts in the government.
As they plan for a possible clash with a new Greek government over bailout terms, they are also exploring a political compromise with the Syriza leader should he take power after the Jan. 25 election.
The officials say they view the chances of a so-called Grexit as extremely slim and express confidence the euro zone could clinch a deal with Tsipras if he wins and is able to bring together a ruling coalition, which is far from certain.