Letter from Berlin: Is Merkel's Government About to Crumble?

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It will be an unusual gathering at Berlin's Bellevue Palace, the residence of the country's president, on Tuesday evening. Chancellor Angela Merkel will be there. So too will Vice Chancellor Guido Westerwelle, Parliament President Norbert Lammert and Defense Minister Karl-Theodor zu Guttenberg. A further 150 guests have likewise been invited.

The occasion is the departure of Horst Köhler, the erstwhile German president who resigned from his largely ceremonial position in a huff a little over two weeks ago. There will be music from a military band, a bit of practiced ritual and then the thin-skinned Köhler will be history.

Normally, of course, a presidential shuffle in Germany, while accompanied by the requisite pomp and circumstance, is hardly of political note. This time, though, it is different. The president's leave-taking could pave the way for a premature farewell of much greater moment: Merkel's own.

"The phrase 'new elections' is in the head and the heart of all those who value political responsibility," Renate Künast, floor leader of the opposition Green Party, told the Süddeutsche Zeitung this weekend. Speaking to the tabloid Bild, her counterpart from the Social Democrats, Frank-Walter Steinmeier, said: "(Merkel's) government has failed. Should they accept that, then new elections would be the best path to take."

Merkel's Waterloo

Their comments come at a time when many in Germany are befuddled by the apparent inability of Merkel's coalition, which pairs her conservatives with the pro-business Free Democratic Party (FDP), to govern. And the frustration isn't just limited to the opposition. Conflict after conflict has marked the eight months since the chancellor began her second term in office (see box at left). And with party and coalition discipline crumbling, an otherwise routine vote on June 30 to replace Köhler threatens to become Merkel's Waterloo.

"One sometimes has the impression that Ms. Merkel is intent on derailing her own coalition," Hans-Ulrich Rülke, a regional leader from the FDP, told SPIEGEL recently. "It is something she should beware of so that one doesn't begin to doubt the wisdom of keeping this coalition together."

Later this month, it is precisely people like Rülke who Merkel has to fear most. Germany's largely ceremonial position of president is filled by vote of the Federal Assembly, a body made up of federal lawmakers and regional delegates. Merkel's coalition holds a majority, but it is slim. Just two dozen renegades among the 1,244-member assembly could spell doom for her handpicked candidate, the palatable, but otherwise unremarkable, Christian Wulff, current governor of the state of Lower Saxony.

Should that happen, Merkel's position will become tenuous indeed. And revolt is in the air.

Of particular concern for the chancellor is her seeming inability to put even a single conflict within her coalition, or even within her own party, to rest. Symptomatic was last week's debate within her Christian Democratic Union (CDU) about the austerity package her government put together last Monday. Many within her party wanted to see taxes raised for Germany's highest earners to forestall accusations that the savings measures made disproportionate demands on the country's economic minnows.

Putting a Damper on the Din

Knowing that the FDP would never agree to such a measure, however, the chancellor refused to consider the idea -- and was blasted by members of her own party. Even the president of German parliament, Norbert Lammert, went on record demanding higher taxes "for the lucky ones in our society."

Merkel's effort to put a damper on the din ("I have decided that this package, as we have presented it, is a balanced and correct program.") went unheeded. In an interview with SPIEGEL over the weekend, CDU bigwig Finance Minister Wolfgang Schäuble declined to categorically exclude an upper-bracket tax increase. "Why not?" was his response.

The answer, of course, is that it would cost Merkel her junior coalition partner. Nowhere are the fractures in the chancellor's government quite as obvious as they are between the conservatives and the FDP. Many of the problems lie with the party itself. FDP head Guido Westerwelle, who is Merkel's vice chancellor and foreign minister, led the party down the neo-liberal path for far too long given the economic realities facing Germany. Voters have turned their backs on the FDP in waves -- to the point that the party only enjoys 5 percent support according to recent polls.

But Merkel has done her part as well. She publicly called the authority of Economics Minister Rainer Brüderle (FDP) into question last week in a move that led many to believe his resignation was nigh. She has likewise failed to offer support to reform proposals made by Health Minister Philipp Rösler, also from the FDP, resulting in the likely demise of his signature project.

The rift between Christian Democrats and the FDP is a recent phenomenon -- under former Chancellor Helmut Kohl, they governed together as a conservative bloc for years in Bonn in West German times. Merkel and Westerwelle had even hoped to govern together after 2005 elections, but the FDP failed to secure enough votes and the Christian Democrats were forced to govern in a so-called grand coalition with the center-left Social Democrats. Within that government, the CDU shifted further and further towards the Social Democratic center, whereas the FDP remained more or less the same party it had always been. Today the parties lack much of a shared vision. The FDP's main issue has been tax cuts at a time when many argue that tax increases and austerity measures are needed to address a severe budget deficit and prevent the euro crisis from spiraling further.

For their part, members of the FDP are angry. "We have reached our pain threshold. What does this coalition actually do for us?" asked FDP parliamentarian Joachim Günther plaintively at a meeting of the party's parliamentary group last week.

'Test Case'

"We have always held back, but (Merkel's conservatives) never have. Why do we have to stand for that?" seconded his colleague Sebastian Blumenthal. An anonymous FDP bigwig was quoted by German news agency DPA on Monday as saying a weekend coalition meeting on health care reform could become a "test case" for the continuation of Merkel's government.

Last week, the rhetoric seemed even more drastic, as the FDP and the Christian Social Union (CSU), the Bavarian sister party to Merkel's CDU, engaged in a brief bout of public name calling -- "wild sow" versus "bumbling idiots."

On Monday, coalition leaders were at pains to turn down the volume on the ongoing tiff. "We aren't looking good in the public eye," admitted Volker Kauder, CDU floor leader, on German television on Monday evening. "We have to resolve our differences, tone down our rhetoric and we have to interact as friends rather than enemies." Merkel too has asked coalition members to behave.

Still, the frustrations run deep. A government minister told SPIEGEL last week that there are a handful of ministers who see little point in continuing. He said that a premature disintegration of Merkel's coalition is a very real possibility. According to a survey conducted by pollster Infratest, 55 percent of the German public agrees.

Furthermore, the government is having trouble coming up with an issue that all involved can get behind -- an issue that could define Merkel's second term in office. Instead, every incremental change, whether it was discussed in her coalition agreement hammered together last fall or not, has become a cause for further rifts.

No Alternative

Which means that the approaching presidential election feels increasingly like a vote of confidence on Merkel's leadership. Potentially even more ominous for Merkel, the opposition has come up with a highly attractive candidate: Joachim Gauck, a former anti-communist human rights activist in East Germany, who was later in charge of the administration of the Stasi secret police files after German reunification. Not only have the Greens and the SPD rallied behind him, but there are many within the FDP who were turned off by the heavy-handed manner in which Merkel selected her party's presidential candidate. Some have openly thrown their support behind Gauck. Even within Merkel's CDU, there are some who have wondered aloud whether Gauck might not be the better choice. Were the German public allowed to vote, Gauck would beat Merkel's candidate Wulff by 40 percent to 31 percent, according to recent surveys.

Ultimately, of course, Merkel's fate depends on political calculation. Even as many in the FDP, and within her own party, would like to see the back of her, new elections could send both parties into the opposition -- a prospect that will likely result in at least a modicum of coalition discipline on June 30.

But the fractures remain. Even should her government survive the summer, it appears unlikely that significant improvement will be made. "The fundamental mistake was the coalition treaty," Gero Neugebauer, a political science professor at Berlin's Free University, told SPIEGEL ONLINE. "Merkel failed to come up with a unifying aim for her government. Now, her only grip on power is that there is no alternative."