Angela Merkel undermined by outspoken MPs

Chancellor Angela Merkel's coalition government edged closer to disintegration yesterday as rebellious MPs flatly ignored her warnings about making rash statements and speculated openly about Greece leaving the eurozone.

The latest snub to Ms Merkel's softly-softly approach to Athens' spiralling debt came from a senior conservative cabinet minister who joined the growing revolt against her stance on the euro already voiced by her liberal Free Democrat coalition partners.

Peter Ramsauer, the German Transport Minister and deputy leader of Ms Merkel's Bavarian conservative partners in government, told Die Zeit newspaper that his party was actively working on proposals to eject chronic debtor countries from the eurozone.

"It might be risky and painful for Greece to leave the euro, but it would not be the end of the world," Mr Ramsauer said. He also criticised plans for a permanent European Stability Mechanism (ESM) because the German parliament would have "no control" over it.

His comments came less than 24 hours after Ms Merkel warned MPs to "weigh their words carefully" when discussing the euro. She insisted that "everything" should be done to keep the eurozone together because the financial collapse of Greece and its exit would have a domino effect. "The danger that it would hit everyone is very big," she said. Her warning was prompted by comments from Economics Minister, Phillip Rösler, her liberal Free Democrat deputy, who said that Greece needed an "orderly default" on its debts and did not rule out the possibility of the country being ejected from the eurozone. His comments caused sharp falls on the markets and yesterday the Free Democrats stepped up the pressure on the Chancellor. In an interview with the German edition of the Financial Times, Christian Lindner, the liberals' general secretary, dismissed Ms Merkel's warning. "The markets and the Greeks need clarity, you can't achieve that with a vow of silence," he said.

The Free Democrats were yesterday reported to be conducting a party-wide ballot of members to gain support for a motion which would exclude heavily indebted EU countries from the eurozone. Reflecting the mood among grass-roots liberals, Jürgen Koppelin, the party leader in the northern state of Schleswig-Holstein, said Greece was like an "alcoholic asked to give up drinking while being handed a crate of schnapps". Ms Merkel faces a crucial vote on a key plank of her economic plans on 29 September, and may rely on the votes of opposition MPs for it to pass. This could lead to a parliamentary vote of confidence in her administration which would almost certainly result in the collapse of her coalition.

Silvio's X-rated diplomacy

Not even her position as the world's most powerful woman has prevented German Chancellor Angela Merkel from becoming the victim of playboy premier Silvio Berlusconi's sexist language.

The gaffe-prone tycoon has been overheard referring to the German leader as an "unfuckable lard-arse", according to wiretaps reported by Italian newspapers. The offensive remark is the latest in a string of embarrassing revelations involving the 74-year-old Prime Minister, who three years ago caused a diplomatic incident by describing US President Barack Obama as "suntanned".

Investigators overheard the latest offending remarks during a wiretapped conversation between the premier and the man accused of supplying prostitutes to Mr Berlusconi's notorious parties in Rome and Sardinia. Italian newspapers have previously revealed salacious developments uncovered by investigating magistrates.

In the days before the taped conversation, German officials had been urging the Italian government to speed up its implementation of budget cuts.