The German coalition government led by Christian Democrat Union Chancellor Angela Merkel is facing its most serious crisis since it took office in 2009. The issue also raises serious questions for the whole European Union. On the face of it, the CDU's problems have been precipitated by the Vice-Chancellor and Economy Minister Philipp Rösler, who heads the right-wing Free Democrat Party (FDP). This junior partner has defied Ms Merkel's directive against public discussion of the Greek economic crisis by arguing that Greece should be expelled from the eurozone. The third coalition partner, the Christian Social Union (CSU), has followed suit, calling for the expulsion of all highly indebted member states. Ms Merkel had ordered the silence on Greece with a view to minimising instability in the financial markets, which had been exacerbated by the apparent failure of recent talks between the Greek government and an international troika comprising the International Monetary Fund, the European Central Bank, and the European Commission.
The highly divisive German debate over the Greek crisis is primarily political in nature. The FDP's impressive vote share of 14.5 per cent in the 2009 general election has plummeted. In provincial elections earlier this year, the party lost its conservative stronghold of Baden-Württemberg to a Green-Social Democrat coalition, and lost all its seats in Bremen, the Rhineland-Palatinate, and Mecklenburg-Western Pomerania. Party leader Guido Westerwelle stepped down in May. With its poll ratings now around 3 per cent, the party faces meltdown. For its part, the CSU, which has a majority to defend in Bavaria in 2013, may be distancing itself from Ms Merkel well in advance. After all, EU law does not permit direct bailouts of member states, and the prospective Athens bailout in fact stems from a Franco-German initiative. The German right therefore has some basis for complaining that prudent Germans are bailing out profligate Greeks. As for the Chancellor herself, she has tried only to quell market jitters and has said nothing about the ways EU institutions operate. The Greek budget deficit crisis occurred mainly because the EU's financial bodies failed to restrain the profligacy of the centre-right New Democracy government that was in power between 2004 and 2009. The European Financial Stability Fund, created in 2010, will do little to cure the deadly Hellenic ailment. The backdrop to the German right's opportunism and bloodletting is the deepening democratic deficit within key institutions of the EU.