From the monetary fortress of the European Central Bank to thepro-European duchy of Luxembourg, policy makers are beginning toair their doubts that Greece can stay in the euro.

Post-election tumult in Athens has put the once-taboo subject ofan exit from the 17-country currency union on the agenda, liftingthe veil on possible scenario planning afoot behind the scenes.

“If Greece decides not to stay in the euro zone, we cannot forceGreece,” German Finance Minister Wolfgang Schaeuble said at aconference sponsored by German broadcaster WDR in Brussels today.“They will decide whether to stay in the euro zone or not.”

After 386 billion euros ($499 billion) in aid pledges forGreece, Ireland and Portugal, 214 billion euros in ECB bondpurchases and another trillion euros in low-interest loans forbanks, plus 17 high-level crisis summits, Greece's political chaosthrust Europe into a perilous new phase.

The world is witnessing an “important moment in European Unionhistory, a moment of crisis,” EU President Herman Van Rompuy saidin Brussels on the 62nd anniversary of the declaration by RobertSchuman, then France's foreign minister, that launched postwarEuropean integration.

The euro fell for the eighth day as it dawned on investors thatGreek voters' revolt against austerity, and not the victory ofSocialist Francois Hollande in France, was the more significant ofthe two national elections in the EU on May 6.

Bonds of at-risk countries have suffered since the balloting.Spain's extra 10-year yield over German levels widened to 458 basispoints today from 415 at the end of last week. Italy's widened to412 basis points from 385 over the same timespan. The euro bought$1.2930 at 5 p.m. in Brussels, bringing its eight-day loss to 2.4percent.

“Politically speaking, Greece is already out of the euro zone,”Nicholas Spiro, managing director of Spiro Sovereign Strategy inLondon, said in an e-mailed note. “The only question is about thetiming and disorderliness of its exit.

The Greek parties running on an austerity-for-rescue platformtook one-third of the vote. Top vote getter Antonis Samaras failedto assemble a government, throwing in the towel after a few hours.Second-place finisher Alexis Tsipras of the Syriza party begancoalition talks today, handing would-be partners an ultimatum torenounce support for the bailout.

'CatastrophicUncertainty'

The response outside Athens left little room for maneuver.Schaeuble said that fiddling with the bailout terms would unleash''catastrophic uncertainty'' in financial markets, and the centralbank's verdict came from his former deputy, Joerg Asmussen.

''Greece has to be aware that there is no alternative to theagreed consolidation program if it wants to remain a member of theeuro zone,'' Asmussen, who last year moved from the German FinanceMinistry to the ECB board, told Handelsblatt in an interviewpublished today.

With polls showing roughly the same proportion of Greeks wantingto stay in monetary union while opposing austerity, the hagglingover the future government and possible elections next month putthe country before two incompatible options.

''If 80 percent of Greeks want to stay in the euro, then I thinkthey have to support parties that are in favor of this policy ofstaying in the euro,'' Luxembourg Foreign Minister Jean Asselbornsaid at the Brussels conference. Otherwise ''comes the point whereGreece unfortunately has squandered the opportunity and that willbe very, very painful for the people.''

European treaties label the euro ''irrevocable'' and provide nolegal procedure for a country to leave or be thrown out. A December2009 study by the ECB's legal department deemed an ouster ordeparture ''so challenging, conceptually, legally and practically,that its likelihood is close to zero.''

Europe's crisis managers put the odds at zero until lastNovember, when German Chancellor Angela Merkel and French PresidentNicolas Sarkozy turned a planned Greek referendum on austerity intoan in-or-out vote on Greece's euro future.

The referendum was dropped and the Greek leader who mooted it,George Papandreou, was out within days. A nonpartisan governmentled by former ECB Vice President Lucas Papademos took over. UnlikeItaly, which got its own technocratic government at the same time,Greek politicians gambled on early elections.

Re-Vote

With the coalition talks in Athens at risk of stalemating,another vote may come as soon as next month.

Merkel's first finance minister, Peer Steinbrueck, questionedwhether a new election would yield a functioning Greek governmentwith a broad-based mandate to deliver the additional savingsdemanded by international donors.

Greece may be mired in ''a fragile, virtually paralyzedsituation for months,” Steinbrueck, a potential challenger toMerkel in Germany's 2013 election, said at the Brusselsconference.

The next Greek ballot “will be a referendum on continued euromembership,” said John Stopford, co-head of fixed income andcurrency in London at Investec Asset Management, which overseesabout $90 billion. “As last week's election shows, it's going to bea close-run thing.”

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