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02/01/2010

Chancellor Angela Merkel's first 100 days in power at the head of a new center-right government following her re-election in September have been marred by infighting on economic and foreign policy and opposition accusations of cronyism and incompetence.

Merkel has been accused by members of her Christian Democratic Union of failing to show leadership, and opinion poll ratings for her coalition of conservatives and pro-business Free Democrats (FDP) have been falling ahead of an important regional election in North Rhine-Westphalia, Germany's most populous state, in May.

Media commentators say a senior member of the FDP has now added to the general picture of chaos and confusion by reversing one of the only policies the coalition has implemented since it came to power.

Deputy FDP leader Andreas Pinkwart, editorial writers say, has embarrassed his party and the government by calling for a U-turn on a controversial tax cut for hotel owners.

The reduction in value-added tax (VAT) for hotel visits to 7 percent from 19 percent, effective from Jan. 1, represented a windfall for hotel owners and was criticized as a classic case of the FDP serving its core clientele-- prosperous entrepreneurs. Then a SPIEGEL report last month about a big donation to the FDP from a hotel owner provoked damaging accusations that Merkel's government can be bought. The Finck family, which owns a majority of the Mövenpick hotel group that runs 14 hotels in Germany, donated €1.1 million to the FDP in the run-up to the September general election.

Pinkwart diverged from the FDP's line by telling SPIEGEL that the tax cut amounted to a "bureaucratic monster" and should be reversed. "Good politics corrects itself when a law doesn't work in practice," Pinkwart said in the interview published in the latest issue of the magazine.

The new system of taxing hotel accommodation was too complicated, Pinkwart said. The lower rate of tax will be charged for overnight stays but the higher rate of 19 percent will remain in force for hotel breakfasts. "Dilettantism or intent -- the implementation by the Finance Ministry has created a bureaucratic monster," said Pinkwart, the deputy governor of North Rhine-Westphalia.

He said the hotel tax cut should be suspended and revisited as part of a planned wider reform of the tax system. Pinkwart added that he wasn't happy with the first 100 days of the new government. "The members of the Berlin coalition must learn to trust one another and to remain faithful to their shared principles," he said.

North Rhine-Westphalia governor Jürgen Rüttgers, a member of Merkel's CDU, said he agreed with Pinkwart.

Media commentators say the FDP and parts of the CDU are panicking because their opinion poll ratings are falling ahead of the North Rhine-Westphalia election, and that both parties have cut a poor figure in the last 100 days.

Business daily Financial Times Deutschland writes:

"The center-right government has agreed just one law in the 100 days since it took office. And now prominent members of the FDP want to reverse a key part of that legislation, the VAT cut for hotels. That's more than populism. That is tantamount to dismantling oneself. With this U-turn the FDP has shown that its top people are politically short-sighted and prone to knee-jerk reactions.

"It shows that the FDP and to some extent the conservatives as well, are stumbling their way through government without a coherent strategy."

Center-left Süddeutsche Zeitung writes:

"Andreas Pinkwart says it's good politics to correct a bad law. But he doesn't say that almost all experts said this was a bad law right from the start, and that it would have been good politics to refrain from introducing it in the first place.

"Rüttgers and Pinkwart mirror the state of the center-right coalition in Berlin at the start of the week that will end with its 100th day in office. The glow of victory has vanished and members from the parties' own ranks are opposing the federal government because they're increasingly panicking about a regional election campaign."

Left-wing Die Tageszeitung has a photomontage of a blind Merkel being led by a blind guide dog in the shape of FDP leader Westerwelle.

"Neither of them has a vision of society, neither has any idea how to make an export-orientated nation like Germany fit for the future. It's been one major mistake after another.

"Given the global economic and financial crisis it has become evident that a party as fixated on the rich as the FDP can't help to find solutions for a society that is drifting apart."

"In terms of power politics the chancellor's behavior is very astute but she declines to make her position clear on important issues. There are no clear policies on financial market regulation, on social or education policy or on a future-oriented energy policy. It's reckless to think that doing nothing is enough to avoid making mistakes -- at least if one claims to be a people's party."

Conservative Die Welt writes:

"Angela Merkel faces a dilemma. The leadership style that enabled her to get to the pinnacle of politics is now increasingly becoming a burden and is endangering her power. Her internal critics expect Angela Merkel to exert more authority and decisiveness in dealing with the Christian Social Union (editor's note -- the Bavarian sister party to the CDU, which shares power with the conservatives in parliament and in Merkel's government) and especially with the FDP. But such so-called leadership skills are diametrically opposed to the consensus-seeking, moderating style with which the 55-year-old has so far run her party and which her critics now brand as a 'presidential style.'"

On SPIEGEL ONLINE, Christoph Schwennicke compares Merkel's situation to Judy Garland as Dorothy in the "Wizard of Oz," whose house has just been catapulted by a tornado from the Midwest (her last coalition government with the Social Demcrats) to Oz, a land of munchkins and witches.

"Merkel's new world isn't a very nice one. It may not be a world with witches, but it sure is full of evil guys. Merkel is their protective castle, but she has been robbed of her grand coalition, which offered her a number of advantages. In contrast to the FDP, the SPD had at least four to five very good top politicians with experience in government. It gave her refuge if she disagreed with members of her own party on an issue and it was a broad mainstream party not driven by special interests that also, like Merkel's CDU party, had the common good in mind. More so, anyway, than the FDP -- which has shown itself within a few short weeks to be pretty shameless in tending to its special interests."

"Suddenly, the chancellor doesn't give the appearance of strength she was once known for. Some are even starting to ask themselves whether they overestimated her. Earlier, it was taboo for anyone in Merkel's party to express public criticism of the chancellor. … But, within the CDU, a kind of secular enlightenment is playing out and those who are unhappy have started to take on Merkel -- publicly, directly, confrontationally and combatively. Backhanded compliments of the chancellor used to come every now and then from one state governor or the other, and criticism within the party didn't usually extend beyond that. A shift is occuring here, though. Still, Merkel is politically instinctive enough to take these changes seriously. As long as it only plays out in the Berlin political bubble, she doesn't have much to fear. The complaints haven't reached a critical mass that could threaten her. But it could get dangerous if these doubts were to somehow spread to voters."