The Euro Crisis Hits Berlin Merkel's Authority Is on the Wane

At odds: German Chancellor Angela Merkel (L) and Economy Minister Philipp Rösler, the leader of the pro-business FDP party.

At odds: German Chancellor Angela Merkel (L) and Economy Minister Philipp Rösler, the leader of the pro-business FDP party.


Part 2: FDP Going Down 'Extremely Dangerous' Path

Alex Alvaro, an FDP member of the European Parliament, said developments in his party were "extremely dangerous." According to Alvaro, "ideas and resentments are being expressed that were last voiced by (former Vice Chancellor) Jürgen Möllemann in 2002." Alvaro also reminds us of a period in the early 1990s, when the "National Liberals" led by former Attorney General Alexander von Stahl sought to gain influence within the FDP. "There is this right-wing potential. But the FDP mustn't embrace it," says Alvaro. He believes that the party leadership has an obligation. "What is missing is a long-term intellectual orientation," he says, noting that the party now faces the risk of a "lack of depth."

Alvaro is concerned about a planned referendum among party members, spearheaded by Bundestag member Frank Schäffler, that is aimed at preventing the permanent European Stability Mechanism (ESM). If Schäffler succeeds, says Alvaro, it will likely spell the end of the coalition, because Merkel wants the ESM.

Schäffler needs only 3,400 signatures for his petition to conduct the survey. He will likely have collected that number by the end of the week. Then there will be a vote, and if a third of all FDP members vote and a majority of those voting oppose the ESM, Schäffler will have established an anti-euro policy supported by the party base.

It seems as if the FDP's membership is being adjusted to achieve Schäffler's goal. According to internal estimates, 500 people joined the party last week just to support the membership referendum. A look at Schäffler's website, where euroskeptics can vent their drastic rhetoric, reveals who these people are. A man named Markus Zehme, who just joined the FDP, thanks Schäffler for his "superb idea and measure," and continues: "It is almost high noon, and the clock is ticking for those hoping to prevent, at the last minutes, these brazen plans to institute a rip-off of Germany."

By responding to the pressure to take a stand, Rösler has led his party down a precarious path. His remarks are intended to send a message to euroskeptics within his own ranks that he takes their concerns seriously. But he also runs the risk that, in doing so, he will only encourage them even further. What Rösler lacks is a strategy. The direction in which he is leading the FDP changes from week to week. Before he was chosen as party leader, he stood for compassionate liberalism, and later for tax cuts. The latest twist is called euroskepticism.

CSU Supporting Euroskeptic Stance

Rösler's approach offers Foreign Minister Guido Westerwelle an unexpected opportunity to boost his own profile. In a policy statement, Westerwelle plans to declare his support for Europe and the European policy traditions of his office. His diplomats have urged him to move in this direction, and even Genscher was making phone calls last week to recruit allies for this policy.

Meanwhile, Rösler is getting some unexpected support from the CSU. "The attacks on Rösler were exaggerated and unnecessarily damaged the mood within the coalition," says Stefan Müller, the leader of the CSU national committee in the Bundestag. "At any rate, it's clear that an insolvency procedure for distressed countries will be necessary if the aid coming from other countries is no longer effective. That's the position of the CSU."

Bundestag member Peter Gauweiler represents an even more skeptical position within the CSU. He intends to run for the position of deputy CSU chairman at the party's national convention in early October. Gauweiler has opposed the euro, which he once called "Esperanto money," for years.

This isn't good news for Merkel. Even before Gauweiler's candidacy, the CSU was competing with the FDP for the position of Greece's sharpest critic. At its convention, the CSU plans to adopt a resolution calling for new rules that would make it possible to exclude debtor nations from the euro zone. The FDP hasn't reached that point yet. But neither Rösler's nor Ramsauer's words have made any impression on Gauweiler, who says: "It would have been better if they had not approved the euro bailout fund, of which they are now so critical, in the cabinet."

A group of politicians who seek to oppose the FDP and the CSU is now taking shape within the CDU. "I am concerned about how the FDP leadership is not adequately putting the brakes on anti-European populism," says Thomas Strobl, the CDU general secretary in the southwestern state of Baden-Württemberg. "We had a better image in the Grand Coalition (of the CDU/CSU and the Social Democratic Party) than we do today, even though we're governing with our preferred partner."

Norbert Röttgen, the CDU leader in the western state of North Rhine-Westphalia, is introducing a pro-European motion into his party's regional executive committee on Monday. The motion includes the following statement: "The goal of the aid for Greece is to preserve the unity of the monetary union and make it clear that the member states of the euro zone are defending the common currency." Röttgen wants to gradually create a "collective Europe" with more closely interconnected institutions.

'More Europe, Not Less'

Finance Minister Wolfgang Schäuble and influential politicians within the CDU/CSU parliamentary leadership have been developing the next major integration step for some time. "The lesson to be learned from the crisis is that we need more of Europe, not less," says CDU politician Peter Altmaier, a close ally of Merkel.

Schäuble wants to amend the European Treaties to promote greater integration among all 27 countries in the EU, and not just the 17 member states of the euro zone. Otherwise, says Schäuble, an organization competing with the European Commission will develop without sufficient democratic control.

Schäuble is eyeing two possible solutions. The first would involve the establishment of a special parliamentary committee to oversee the economic government, which would consist of representatives of the national parliaments. But the minister would prefer a second approach, in which the future economic government would be established under the umbrella of the EU. Then the European Parliament or a parliamentary committee could assume the role of overseer. His ideas are still evolving, but if Schäuble has his way, a convention could be convened this year to prepare the changes.

But there are also euro critics within the CDU. Although Merkel will address the rank and file of the party in so-called regional conferences starting Monday, many fear that a real debate over the euro will not materialize. "The purpose of these conferences is to announce policy. They cannot replace grassroots work," says CDU Bundestag member Wolfgang Bosbach.

Others are openly calling for a referendum of party members like the one likely to take place in the FDP. "I am very much in favor of that," says Manfred Kolbe, a member of the Bundestag from the eastern state of Saxony. In Kolbe's opinion, the chancellor's statement that "if the euro fails, Europe will fail" is "grossly negligent. The euro will probably fail, but it is imperative that Europe not be allowed to fail."

And the government? Can it fail? Its euro policy is not very coherent, and Merkel currently lacks the authority to bring together opposing positions. But it's unlikely that she will be brought down soon.

The FDP is stuck with the CDU/CSU for the time being, because of the possibility that it would not even garner enough votes in new elections to secure seats in the Bundestag. Rösler's flirtation with populism is so dangerous because it could provoke an end to the coalition, which would only constitute a loss for the FDP at the moment.

Speaking to close allies, Genscher recently voiced his concern that he CDU/CSU and the SPD could soon join forces. According to Genscher, the necessary decisions would seek their own majorities.

The SPD is trying to quash talk of a new grand coalition. Party leader Sigmar Gabriel says: "The SPD is prepared to raise its hand to stabilize Europe, but not to preserve Angela Merkel's power. Therefore, if the government falls apart, a grand coalition is not an alternative for us, but new elections are." Not everyone in the party leadership is as convinced. If the euro crisis continues to deteriorate, the SPD could come under growing pressure to enter into a coalition with the conservatives.

Markus Feldenkirchen, Christoph Hickmann, Dirk Kurbjuweit, Peter Müller, Ralf Neukirch and Merlind Theile

Translated from the German by Christopher Sultan

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