BERLIN--German Finance Minister Wolfgang Schäuble Thursday cast doubt on Greece's future in the eurozone, saying that many economists thought the country needed a debt write-down--something he insisted wasn't legally possible as long as it remained a member of the currency area.
But the most influential member of Chancellor Angela Merkel's government also stressed that eurozone members now had a duty to start negotiating with Greece about the terms of a new bailout provided Athens fulfilled the conditions it agreed to at a summit of the region's leaders on Monday.
Speaking on Deutschlandfunk radio, Mr. Schäuble indicated that he still believes a temporary Greek exit from the single currency union, which he proposed last weekend, could be the best option for Greece.
"Perhaps it would be the better path for Greece," he said.
He stressed Greece's situation is "extraordinarily difficult," given the country's already high debt level and need for another aid package of up to EUR86 billion ($94.5 billion).
"I don't know, nobody knows at the moment how this should be possible without a haircut. And everybody knows that a haircut is incompatible with a membership in the monetary union," he said. "But we will take up negotiations (about a third bailout), we will make any effort, but we must respect the rules."
A so-called haircut on debt is a write-down on the face value of Greek government bonds. The International Monetary Fund has repeatedly called for more debt relief for Greece to make the country's debt level sustainable.
Mr. Schäuble said Greece's creditors would now assess whether Athens had fulfilled the conditions to start formal bailout talks.
If the assessment is positive, he said he would ask the German lower house to give the government a mandate to start such talks at a vote expected to take place Friday.
He also said the austerity measures passed by the Greek Parliament early Thursday were an important step. The measures include steep spending cuts and tax increases, needed to secure a fresh bailout.
Eurozone leaders Monday agreed that Greece could receive up to EUR86 billion in fresh loans provided Athens enacts several bills, such as pension reforms and higher taxes.