Frank-Walter Steinmeier, a leading member of the main opposition Social Democrats said the deal on the table "is not a sustainable solution for Greece" and argued that the government had merely "bought time" — above all to avoid addressing "unpleasant truths."
"You know that ... everything points toward a haircut in the end, but you are avoiding this truth like the plague," Steinmeier told Schaeuble. However, he said his party would back the deal because "we cannot leave the Greeks in the lurch."
The government argues that full-scale debt relief is legally impossible at present and would send the wrong message.
"If you say debt will be forgiven, then people's readiness to save in order to get further aid is weakened," Schaeuble said. "If we want to help Greece along this difficult road, we must advance step by step, and the wrong speculation at the wrong time doesn't solve the problem."
Some lawmakers in Merkel's coalition argue that the government's current approach already goes too far.
Klaus-Peter Willsch, a backbencher with Merkel's Christian Democrats who has become a prominent critic of her rescue policies, told lawmakers that "the question of whether a country leaves a currency union does not automatically lead to armageddon."
"We know from our private lives that you don't throw good money after bad," he said. "Let's end this road today."