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Updated: February 4, 2010 16:28 IST

Merkel’s new govt. fails to impress Germans

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German Chancellor Angela Merkel. File photo: AP.
German Chancellor Angela Merkel. File photo: AP.

Chancellor Angela Merkel’s new government marks 100 strife-filled days in office on Thursday in a defensive mood, with a nervous eye on an upcoming state election that could hamper the German leader’s ability to set the agenda for Europe’s biggest economy.

Merkel’s centre-right government took office October 28, replacing a four-year-old “grand coalition” with her main rivals on the left. The conservative’s coalition with the pro-business Free Democrats, an alliance of choice rather than necessity, was meant to focus on the challenge of boosting economic growth.

“I have no illusions: this won’t be an easy parliamentary term,” Ms. Merkel said recently as she looked forward to the tasks her government faces.

But its main problems have been homemade: Germans have seen constant posturing and squabbling over tax-cutting plans and a host of other issues.

Long used to keeping herself above the fray of everyday political arguments, Ms. Merkel has seemed reluctant to intervene.

The new coalition’s “image has been damaged,” said Gero Neugebauer, a political science expert at Berlin’s Free University. It also has failed to explain its aims, he added.

A hastily negotiated coalition deal left many open questions, most damagingly over tax. It said a vaguely defined tax reform - involving income tax relief of nearly euro20 billion ($28 billion) a year in an effort to boost the economy - should take effect next January “if possible.”

Conservatives questioned the plan in the light of strained public finances, while Free Democrats insisted on sticking to the date. Coalition leaders have postponed a decision until the spring, and further battles loom over possible reform of the health insurance system.

In addition, Ms. Merkel lost her first minister in record speed: the labour minister, a former defence minister, quit after a month amid fallout from a deadly airstrike in Afghanistan in early September.

The infighting matters ahead of elections May 9 in Germany’s most populous state, North Rhine - Westphalia, run by the same alliance that now governs Germany.

Two recent polls show the coalition falling short of re-election. If that happens, Ms. Merkel’s national government will lose its majority in parliament’s upper house, which represents Germany’s 16 states.

That would leave Ms. Merkel having to haggle with opposition parties to get legislation passed. Those parties say big tax cuts make no sense, and polls also show a majority of Germans against cuts in 2011.

Germans often opt in state elections to curb the power of parties that control both the national government and many regional ones, no matter how good their performance, Mr. Neugebauer said.

“Now the performance is bad and the population doesn’t know what the government actually plans,” he added.

Ms. Merkel accentuates the positive. Her own approval rating remains respectable, although a poll found it dropping to 59 percent in January from 70 percent in December. Germany’s main centre-left party hasn’t yet recovered from a heavy election defeat last year.

Thanks to a recovery in exports, the economy is on track to grow by 1.4 percent this year following a steep contraction in 2009.

Ms. Merkel points to an initial tax-relief package passed in December as evidence of “quick action.” However, that won a lukewarm reception and included a tax cut on hotel stays that attracted widespread derision.

“Instead of taking care of jobs and growth, the coalition is concentrating on relief for its clientele,” said Christine Scheel, a lawmaker with the opposition Greens. “It is still talking about unrealistic tax cuts, without for a moment caring about reducing record debt levels.”

The Free Democrats’ leader, Foreign Minister Guido Westerwelle, insists that “difficulties starting up sometimes can’t be avoided.”

“The government will be measured by its results, not by daily mood fluctuations,” he said.

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