THE LEADER of Germany’s pro-business Free Democrats (FDP), Guido Westerwelle, has thrown his support behind German chancellor Angela Merkel’s re-election bid in next month’s general election.
He ruled out helping the “all washed up” Social Democrats (SPD) to a fourth term in office in a three-way coalition with his party and the Greens.
The willingness of Mr Westerwelle (47) to burn one of his coalition bridges six weeks before polling day is an indication of the confidence in his FDP camp at the election outcome.
Weekend opinion polls gave the the FDP 13 per cent support and, in coalition with Dr Merkel’s Christian Democrats (CDU), a comfortable 49 per cent.
The fact that Mr Westerwelle’s pro-business liberal party is riding high in the middle of a global economic crisis has left German analysts and commentators scratching their heads, particularly as the Left Party has failed to capitalise on public ill-will towards big business and bank bailouts.
Mr Westerwelle suggested that voters shared FDP scepticism at the grand coalition government’s large-scale state intervention in the finance sector and were concerned at the ballooning public debt.
“There is simply a big difference between the published opinion and public opinion in Germany,” he told foreign journalists in Berlin yesterday.
“Voters realise that we need a strong social framework for everyday life and work, not a stronger state. The state isn’t the better banker or businessman.”
Berlin has been hit hard by the financial crisis, bailing out state-owned banks and taking stakes in two leading private banks.
The bank rescue packages combined with two economic stimulus packages add up to more than €650 billion in extra spending that has blown a hole in the federal budget.
Germany’s public deficit is expected to hit more than 6 per cent of gross domestic product next year, well beyond the 3 per cent ceiling in the euro-zone rulebook.
While Mr Westerwelle has nailed his flag to a CDU-led coalition, he is determined not to be seen as a pushover. He has made FDP support dependent on guarantees of spending cuts and a major overhaul of Germany’s complicated tax system.
That could cause friction with Dr Merkel: although she has promised fiscal reform and tax cuts, the rocketing public deficit has left her unwilling to name a date.
Mr Westerwelle sidestepped questions about whether the FDP – a friend of deregulation and free-market policies – would support greater regulation for Germany’s banking sector to prevent another economic crisis. Instead, he called for financial regulation, currently split between two agencies, to be brought under one roof.
As kingmaker for both CDU and SPD coalitions in recent decades, the price for FDP support has always been control of the foreign ministry. Mr Westerwelle brushed off questions about whether he harboured similar ambitions in a new CDU-FDP coalition, joking: “I would be happiest with agriculture and culture.”