Angela Merkel the German Chancellor rejected demands that Greece provide collateral for emergency loans which caused splits in her cabinet reflecting the euro-area divisions on the issue.

Ulrich Scharlack, a spokesman for the parliamentary group, said yesterday in Berlin said that Merkel told lawmakers from her Christian Democratic bloc that a call by Ursula von der Leyen the Labor Minister for countries to put up gold as security for bailouts is not the right way.

After the Finnish government said Aug. 16 that it secured collateral arrangement to ensure its contribution would be repaid, this disagreement at the top of Europe's biggest economy underscores risks over a second aid package for Greece.

Volker Kauder the caucus leader and the European Financial Stability Facility told reporters that Merkel was told in the Berlin meeting yesterday that lawmakers from her bloc will provide a majority to approve the 21st of July overhaul of the euro bailout fund.