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03/18/2010

Europe's southern member states are not, of course, the only ones with significant sovereign debt and budget deficit problems. Chancellor Angela Merkel on Wednesday admitted that the German government was facing the "Herculean task" of striking an economic balance between encouraging growth and reining in state spending.

Speaking at the annual German budget debate, Merkel also defended the performance of her center-right coalition in the face of increasingly ferocious criticism from the opposition. Public support for Chancellor Angela Merkel's ruling coalition has continued to slide since last September's general election, reflecting the political partners' failure to agree on key issues like tax reform, adjustments to the overdrawn health care system and Germany's future approach to nuclear energy. Now opposition politicians have taken their gloves off.

Frank-Walter Steinmeier, floor leader for the Social Democrats (SPD) in German parliament and Germany's former foreign minister, on Wednesday mocked Merkel's coalition -- which pairs the chancellor's conservatives with the business-friendly Free Democrats (FDP) -- as "the country's biggest non-governmental organization," adding it was "facing the ruins of a wrecked marriage."

The opposition's bellicosity is hardly surprising. A survey conducted earlier this month found that support for Merkel's Christian Democrats had slipped to 34 percent while the FDP, which won over 14 percent of the vote last September, had plunged to just 7 percent. A poll conducted by Forsa for the newsmagazine Stern and published on Thursday found that the FDP now enjoys 8 percent support.

Such numbers are bad news for Merkel's coalition ahead of the May 9 state elections in North Rhine-Westphalia. The ballot will be closely watched, not least because it is the first regional vote to measure the government since the new coalition took over. Much is at stake for Merkel who, as well as risking a dent to her political reputation, may see her coalition lose control of the Bundesrat, Germany's upper legislative chamber. Adding to her problems in the run-up to the election is the fact that the local branch of her party also faces corruption allegations.

German media commentators add to the criticism on Thursday, arguing the ruling coalition needs to iron out its many issues of contention, or else face a battering in the May vote.

The left-leaning daily Die Tageszeitung writes:

"From the outset, Merkel has remained true to her style of governing. She operates by lying in wait. She does not act but rather avoids action. She hardly makes mistakes -- so she can pounce on the mistakes of others. It would be wrong to call this style of government 'presidential.' Merkel does not rise above conflict, rather she uses it to her own advantage. This is not simply a calculated move: She does not have the power to end conflicts by putting her foot down. Both the CSU (eds note: the CDU's Bavarian sister party) and the FDP seek confrontation."

"The Chancellor has been in power for five years, because she has accepted her relative powerlessness. She follows the lead of the majority within her party, within the coalition, and at the ballot box. The next strong signal will come from the elections in North Rhine-Westphalia. That gives voters there a lot of power, even over federal policy. That power should be grabbed by its citizens."

The right-leaning daily Die Welt writes:

"Damaged though it is, the federal government yesterday found a common language for the first time since taking office. There was agreement that welfare should be 'perfect fit' instead of simply investing in a one-size-fits-all model, a perspective that some from the opposition once again branded as 'social coldness.' But given the price of social programs (they represent almost half of the total budget) during these times of rising unemployment, such polemic is not likely to impress the German public. The same can be said of planned health care reform: Slowly, word is spreading, that ... a per capita premium is more equitable than the current system whereby high earners can opt out. Finally, Greece: the government intends to combat so-called credit default swaps, which bet on the failure of the country. But not everything is to be blamed on speculation, Greek fiscal policy is also targeted. The same applies to the municipalities that have groaned under the pressure of the financial crisis -- but who have not always kept their financial house in order in a way that could have prepared them for hard times."

"In other words, there is a clear emphasis on personal responsibility, rationality and solidarity in many policy areas. If the government can now teach this tune to Foreign Minister Guido Westerwelle (eds. note: Westerwelle is also the leader of the FDP), Merkel's coalition would take a big leap forward."

The center-left Berliner Zeitung writes:

"We already know that (Merkel's coalition) is facing a test with the pending election in North Rhine-Westphalia. Politicians are not interested in making the situation more difficult with unpleasant pronouncements from Berlin, especially as the CDU and FDP cannot agree on crucial points. But the approach does not work: on the one hand voters hear ominous words about massive challenges for the future, but on the other hand, politicians are doing nothing. Those who outline a Herculean task must begin to address it. But Chancellor Angela Merkel's coalition remains in stand-by mode."

The financial daily Handelsblatt writes:

"Not six months after the CDU-FDP election victory, the chancellor is standing with mostly empty hands before the electorate. On issues like tax, health care, education or streamlining the bureaucracy, little has been achieved."

"The prevailing disappointment about this patchy performance has been most notably felt by those who expected the Christian Democratic Union and the FDP to deliver a decisive and business-friendly package of economic reforms. Much has been promised but little delivered. The impact is like a slap in the face: According to a Handelsblatt survey, more than 90 percent of managers give the conservative-liberal government a poor rating. Initial optimism about the national election result has also given way to sober disillusionment among business associations."

"The main obstacle to necessary reforms is the political focus on the elections in North Rhine-Westphalia. But whatever the outcome of that vote, as of May 9 Merkel will have to stop mediating and start governing -- and finally go on the offensive".