ON THE campaign trail, Angela Merkel tells voters to think positively. Germany “has come through the economic crisis better than some other countries,” the chancellor says to a crowd in the market square of Schwerin, the picturesque capital of Mecklenburg-West Pomerania, an eastern state. “Many have angst about the euro,” she observes. “You don’t have to. The currency is stable.”
Her supporters are not so sure. Bernd Lampe, a spectator who has belonged to Mrs Merkel’s Christian Democratic Union (CDU) for 45 years, admits to “a little angst”. Bail-outs backed largely by German taxpayers have gone too far, he thinks. His feeling is widely shared. The euro crisis has replaced unemployment as voters’ top concern, says Forschungsgruppe Wahlen, a pollster. Although most are content with their own situation, just 30% expect the economy to improve, compared with more than half in June.
This gnaws at confidence in Mrs Merkel and in her coalition, which includes the CDU’s Bavarian sister party, the Christian Social Union, and the liberal Free Democratic Party (FDP). Little more than a third of the electorate would back them if elections were held today. The opposition Social Democratic and Green parties are well ahead. Elections in Mecklenburg-West Pomerania on September 4th and in Berlin two weeks later are likely to confirm the opposition’s strength.
A bigger worry is mounting dissent among Mrs Merkel’s allies. Helmut Kohl, the last CDU chancellor, who launched both the euro and Mrs Merkel’s political career, fumed in an interview that Germany is “no longer a predictable actor, either domestically or abroad”. Christian Wulff, who owes his job as Germany’s president to Mrs Merkel, complained that the financial markets are pushing governments around. Politics must “regain its ability to act,” he demanded. The CDU rank and file, never wholly at ease with the East German-born Mrs Merkel as party chairman, is bewildered by her abrupt changes of course. She scrapped conscription, a conservative sacred cow. A nuclear accident in Japan prompted her to shut down nuclear plants in Germany.
But nothing is more dangerous to her than the euro crisis. Mrs Merkel has tried to help indebted euro members while refusing to write blank cheques. But the markets have repeatedly tested that approach, requiring ever larger and more elaborate bail-outs. Now, Germany’s increasingly sceptical Bundestag (lower house of parliament) is about to weigh in. This month it will consider legislation to approve expanded powers for the European Financial Stability Facility (EFSF), a temporary fund for helping the indebted euro countries. After that it will vote on a second bail-out of Greece, worth about €109 billion ($157 billion), and then on a permanent successor to the EFSF.
Resistance, much of it from Mrs Merkel’s coalition, is stiffening. Dissenters have two main worries. The first is that the Bundestag will be stripped of its right to determine how taxpayers’ money is spent. They expect encouragement on September 7th from a ruling by the constitutional court on the legality of the first Greek bail-out and the EFSF. The court is not expected to overturn the measures, but may reinforce the Bundestag’s authority over budgetary matters. The trick will be to do that without paralysing the institutions being set up to deal with euro crises.
The second fear is that Germany will end up pouring even more money into countries that are unwilling or unable to solve their own problems. The rescue measures “will certainly buy time,” says Wolfgang Bosbach, a CDU leader in the Bundestag who is normally loyal to Mrs Merkel. “But I fear they won’t solve the problem permanently, so there will have to be more aid.” Greece’s problem is not lack of credit; it is lack of competitiveness, he believes.
There are enough pro-rescue votes in the Bundestag to pass the legislation (the main opposition parties favour even more generous measures, such as issuing Eurobonds jointly guaranteed by euro-zone governments). The question is whether the “chancellor majority” will suffice to enact the package without opposition votes. If the majority buckles, Mrs Merkel would be weakened, perhaps fatally. The government could collapse, two years before elections are scheduled. But this seems unlikely. None of the coalition parties is keen to face elections now. The FDP, which harbours some vocal sceptics, might not even re-enter the Bundestag. Mr Bosbach expects the chancellor’s majority to hold up, though he does not plan to join it.
Belatedly, Mrs Merkel is starting to counter the threat. She will try to placate the CDU’s base in a series of regional meetings and has set up a commission to fashion a party consensus on the euro. Her rhetoric now sometimes throbs with un-Merkel-like fervour. “Europe is the most important thing we have,” she says (though not in Schwerin). Other CDU leaders are sounding Europhile notes not heard for some time (without providing much detail or any timetable). Ursula von der Leyen, the labour minister, calls for a “United States of Europe”.
Mrs Merkel may recover from her mid-term slump. Though CDU traditionalists grumble about her leadership, they have no one capable of challenging her. Rising stars like Mrs von der Leyen are modernisers like the chancellor herself. “There is no alternative centre of power” within the party, says Gerd Langguth of the University of Bonn. With luck, Mrs Merkel will have two years to persuade voters, also, to see the brighter side of things.