GERMANY: The German chancellor has kept her coalition steady with consensus-style governing, writes Derek Scally in Berlin.
German chancellor Angela Merkel's grand coalition government has marked its first anniversary this week with a very expensive birthday card: a two-page spread in this morning's Spiegel magazine titled "Germany is moving forward".
The self-promoting advert with a five-figure price tag tells how, a year after the new government took office, economic growth is at a five-year high, unemployment has fallen to a four-year low below 10 per cent, and Germany has finally met EU deficit rules.
Out of modesty or space limitations, the advert doesn't tell how Dr Merkel won kudos within the EU for helping secure last year's budget compromise. Nor does it remind us how President Bush rewarded her efforts to revive transatlantic relations with a very public backrub.
At home too, Dr Merkel won praise for her cool, consensus-driven style of governing that is light years from the personality-driven pragmatism of her predecessor.
But Dr Merkel has little time, in any sense, for taking stock. The next year will be the busiest of her political life as she does a diplomatic double header, juggling the presidencies of the European Union and the G8.
While Britain and France wait for new leaders, Dr Merkel knows that she has a unique chance to push the EU for a new take on common foreign, security, energy and environment policies.
Berlin's G8 strategy is no less ambitious, addressing budget austerity, controls for hedge funds and a new partnership programme between African countries and western donor countries.
Her government's honeymoon period at home lasted just six months until the much-trumpeted reform of the healthcare system to cut costs and reduce bureaucracy turned out to be a botched compromise that did neither.
Now it's hard to know whether Dr Merkel's determination to continue reforms is a threat or a promise.
Next year is free of state elections, providing her federal government with a 12-month policymaking window, but observers suggest that international commitments mean there will be little progress on the domestic front.
"The EU and G8 will help shift attention from her domestic problems," said Dr Gerd Langguth, a political scientist and Merkel's biographer. "But she must make sure she doesn't take her eye off the ball at home." Dr Merkel knows there is a line-up of rivals within her Christian Democratic Union (CDU) waiting for her to do just that.
Jürgen Rüttgers, the CDU state premier of North-Rhine Westphalia, has got a head start with an attention-getting plan to reverse the recent labour market reforms.
In particular, he is calling for long- time contributors to unemployment insurance funds to receive dole payments for longer than the 12-month ceiling agreed two years ago.
He hopes the CDU will adopt his package of measures to protect citizens from what he calls "a life of arbitrariness and existential angst". The proposal has already won huge support from, of all places, the Social Democrat (SPD) rank and file, but has been dismissed as too costly by SPD leaders.
That prompted the conservative Mr Rüttgers to accuse the socialists of being "neo-liberal", an example of the political identity crisis induced by the year-old grand coalition.
Three years ago, Dr Merkel was the neo-liberal, telling the CDU party conference in Leipzig that she would ignore the "wailing and gnashing of teeth" to prune Germany back to health.
At next week's party conference in Dresden, the CDU leader will have to explain why the grand coalition has taken the CDU so far away from its neo-liberal "Leipzig programme" and why rank and file members cannot recognise a CDU imprint on the government's work.
The conference will also bring into the open Dr Merkel's other leadership rivals, the so-called "crown princes" of the CDU.Christian Wulff, state premier of Lower Saxony, has chosen to keep his distance from the grand coalition to remain untainted if it goes down in flames.
Roland Koch, state premier in Hesse, has decided to ally himself to Dr Merkel, his former rival, but observers wonder how long that display of loyalty will last.
Another troublesome rival, Bavarian leader Edmund Stoiber, has also joined the Angie fan club, although his membership was in doubt last week. Stern magazine alleged he was approached by former chancellor Schröder after last year's general election deadlock to become deputy leader if they both agreed to dump Dr Merkel.
In the end, her two male rivals took each other out, leaving the east German pastor's daughter to assume power.
"If there's one thing she's mastered," a close aide told Spiegel magazine, "then it is her ability to let competitors play off each other."
Despite a year of painful compromises and small reform steps, there is growing recognition in Germany that Wednesday is the first of many anniversaries that Angela Merkel will be marking in power.