Merkel will need to get tough ahead of German polling

 

CHANCELLOR ANGELA Merkel brushed off her party’s election disaster in Hamburg yesterday and is now focused on euro zone reform ahead of a crucial German state poll next month.

A grim-faced Dr Merkel said yesterday local themes were “around 80 per cent responsible” for the historically low Christian Democrat (CDU) vote on Sunday, halving support to below 22 per cent and forcing the party back into opposition.

Putting Hamburg behind her, the German leader is determined to be well-prepared ahead of next month’s collision of European and regional politics: two days after EU leaders meet to agree new euro rules in Brussels, voters will go to the polls in the south-western state of Baden-Württemberg.

Dr Merkel is hoping to avoid a repeat of last year when the EU agreed a Greek bailout days before voters ousted her ruling CDU party from power in North Rhine-Westphalia. Then, post-election analysis suggested voters were critical of bailing out Greece after a heated and xenophobic anti-Greek campaign in the tabloid press.

After assuring voters that aiding Athens was a one-off, Dr Merkel now has to convince sceptical voters that a permanent bailout mechanism, combined with full-scale euro zone reform, is in the German interest.

The southwestern state is home to thousands of small- and medium-sized business owners, the backbone of the German economy. These are the people who will be paying for Germany’s new European solidarity. To win them over, Dr Merkel will have to return from Brussels with proof that greater solidarity from Germany will be coupled with further Swabian-style fiscal austerity from the others.

There is resigned acceptance in Berlin circles of the need for a wider bailout mechanism, but the same is not the case in faraway Stuttgart. “The European debate has changed in Germany,” said Almut Möller, European integration analyst with the German Council on Foreign Relations. “There are new experts increasingly shaping public opinion who are often EU-critical, while the traditional pro-EU side has emotional arguments and little other ammunition.”

If the euro zone reform agreed next month does not carry a clear German imprint, Dr Merkel knows voters could abandon the CDU in record numbers. A mass defection in a state governed by the CDU for half a century would force a motion of confidence in Dr Merkel’s 11-year party leadership.

As well as the euro zone debate, Dr Merkel’s has to finance €500 million extra annually to pay for social-welfare top-ups. Her officials insist that they want “agreement on a complete euro zone reform plan” and have no interest in special pleading from Dublin or elsewhere.

“Dr Merkel may have to get unpleasant in Europe, demanding people keep their austerity promises,” said Dr Guérot, Berlin head of the European Council on Foreign Relations.