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German Lawmakers Debate Greek Bailout, Merkel Faces Rebellion

Chancellor Angela Merkel prepares to vote during the session of Germany's parliament, the Bundestag, in Berlin, July 17, 2015.

German lawmakers broke off their holidays on Tuesday to debate Greece's third bailout plan before approving it, though Chancellor Angela Merkel faces a rebellion in a vote shaping up as her last chance to keep Athens in the eurozone.

Up to a quarter of Merkel's conservatives could vote against the 86-billion-euro ($95 billion) package, sending the government a clear warning not to return to parliament again to ask for more aid.

Support from parties including the Social Democrats (SPD), Merkel's junior coalition partner, and the opposition Greens means approval is not in doubt. But a rebellion by a large number of her allies would be a blow for Merkel, who remains highly popular after 10 years in office.

Merkel and Finance Minister Wolfgang Schaeuble will make the case for backing the bailout plan in party meetings on Tuesday.

Schaeuble, who last month told parliament that talks on the third bailout were a "last attempt" to solve the Greece crisis, threw his weight behind the package ahead of Wednesday's vote and said Athens was ready to reform.

Many senior figures in the ruling coalition agreed.

"The Greek government has worked very constructively, and has made a 180 degree change," SPD budget expert Carsten Schneider told television station n-tv, saying he would vote 'yes' in Wednesday's vote in the Bundestag lower house of parliament.

Breaking ranks

But a significant minority of Merkel's conservatives – her Christian Democrats (CDU) and their Bavarian Christian Social Union (CSU) sister party - oppose the plan.

Last month, a record 65 lawmakers from the conservative camp broke ranks and refused to back negotiations on the bailout. The daily Bild even estimated that up to 120 CDU and CSU members out of 311 might refuse to back the now-agreed deal.

The debate has been given added spice this time after Volker Kauder, head of the conservatives' bloc in parliament, incensed fellow lawmakers earlier this month with threats of retaliation if they rebelled and voted against a bailout.

The upshot is that those who opposed backing negotiations on the bailout are unlikely to vote in favor of the package for fear of being accused of bowing to Kauder.

Schaeuble, who argued last month that Greece should consider a "timeout" from the eurozone, sought to shore up support for the bailout ahead of Wednesday's vote, citing a dramatic change in the Greek government's readiness to reform.

Yet some lawmakers still supported the timeout idea for Greece that Schaeuble floated last month.

"A temporary Grexit remains the right solution," said Christian von Stetten, a member of Merkel's CDU who said he would vote 'no' on Wednesday.

($1 = 0.9042 euros)