Save Greece or save the eurozone? Merkel edges toward a thorny choice.

The German chancellor is a key dealmaker in efforts to extend Greece's bailout and maintain its EU membership. But the crisis is pushing her toward action that will likely shape her place in history.

Angela Merkel does not like drama.

The German chancellor, who famously spent 45 minutes on a diving board in grade school, only taking the plunge just as the school bell was about to ring, has built her career around thoughtful consideration as she inches towards her goals, tracking the public mood along the way.

But the cliffhanger over Greece’s financial future has put the German leader in the middle of a drama with epic consequences that could ultimately satisfy no one.

As the leader of Europe’s economic powerhouse, Ms. Merkel is viewed as the key dealmaker as Greece and its official creditors struggle to reach agreement over how to extend the near bankrupt nation’s bailout program, set to expire at the end of June. As eurozone finance ministers meet again today in Luxembourg, she had sharp words for Greece but told German lawmakers that she believes a deal is still possible.

But if she is wrong – and many think she is – and Greek officials don't blink, Merkel is faced with two uncomfortable choices. She’ll either have to relax rules she has championed since Greece got its first bailout in 2010, or she faces the real prospect that a member will be ejected from the eurozone – an outcome she has said could amount to a failure of Europe's decades-old integration project.

“Angela Merkel has molded herself in recent years as a stateswoman and crisis manager on the European stage,” Manuela Glaab, a political scientist at the University of Koblenz-Landau, says. “The euro crisis is one issue where she will see her name go down in history.”

'Small steps'

Addressing the German parliament today, Merkel, at least publicly, is banking on an agreement. “I'm still convinced: Where there's a will, there's a way,” she said, using the same phrase she uttered last week. “If those in charge in Greece can muster the will, an agreement with the three institutions is still possible.”

But Wednesday, ahead of today’s meeting, Greek Finance Minister Yanis Varoufakis told reporters he had little expectation that the two sides could strike a compromise deal. Greece has so far balked at its creditors' demands, including a politically untenable one to cut pensions. And the country’s central bank warned that failure to reach an agreement could lead to deep recession and increased poverty, and could ultimately drive Greece from the eurozone and the European Union.

That’s a scenario that pushes Merkel out of her comfort zone. Part of her strength and style has been as a patient tactician. In the Greek saga, while the potential fallout for European economies is roiling financial markets to a lesser extent than at similar crisis points a few years ago, the political outcome remains an unknown.

“I believe [a 'Grexit'] could have an effect on her political legacy because she is not a grand European, or rather a European with grand visions," says Josef Janning, a senior policy fellow at the European Council on Foreign Relations in Brussels. "She is someone who is convinced that Europe cannot achieve its successes with giant leaps but small steps that to a certain extent are justified by the problem at hand.”

Her staying power has also depended on weighing the public mood and making choices based on what satisfies the majority, even if they go against ideology and her own party lines. That came into clear focus after Japan’s nuclear disaster at Fukushima, when Merkel committed to phasing out nuclear energy in Germany – a policy that had previously been reserved for left-of-center politicians.

Serving Germany and Europe

But on Greece, she is increasingly finding her opinion out of touch with the public's. A recent YouGov poll showed 58 percent of German respondents saying they would rather see Greece exit the euro, compared to 28 percent who wish the country to stay in the single currency.

She has told Germans all along that if Greece fulfills its austerity obligations the problem will be solved. “People expect that Merkel will protect them,” says Gero Neugebauer, a political scientist at Berlin’s Free University. But the longer the saga continues, the more doubts are sown that Merkel will be able to handle the crisis in a way that won’t shortchange German taxpayers, he says.

Some of that doubt is increasingly coming from her own party ranks. While some are clearly pushing for Greece to simply leave the eurozone, she is still advocating for a solution, although not at any cost.

Tilman Mayer, a professor of political science and sociology at the University of Bonn, says that on the one hand Merkel is taking a risk by maintaining good relations with Greek Prime Minister Alexis Tsipras – although today she issued a rare public rebuke in parliament, blaming Greeks for not honoring their commitments and showing that her patience is running out.

Maintaining some distance might be part of her long-term view. “I have the impression that Mrs. Merkel is trying to keep herself out of the line of fire given the turbulence that is either coming or is already there," Mr. Mayer says. "Therein lies a certain wisdom."

"She is protecting herself and possibly even Germany to a certain extent, because of all the controversies that can arise from such policies – to keep the Greeks in the euro or show them the door – the Germans are ultimately the ones who will be seen as responsible.”