Tuesday

30th May 2017

Merkel in election setback amid discontent on euro-crisis

  • Sunday's defeat for Merkel is expected to be repeated later this month (Photo: consilium.europa.eu)

The opposition Social Democrats have won the regional elections in Mecklenburg-Western Pomerania, the home state of German chancellor Angela Merkel, whose popularity is dwindling amid growing discontent over the euro-crisis and the Greek bailouts.

Merkel's Christian Democrats (CDU) won 23.1 percent of the vote in the north-eastern state on Sunday (4 September), down from 28.8 percent in 2006, while her junior coalition party, the Liberal Free Democrats (FDP) plummeted to 2.7 percent, below the five-percent threshold needed to make it into the state legislature.

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Although it was expected to score badly, the FDP did not foresee being left out of the regional parliament, with secretary general Christian Lindner calling it "a bitter-tasting defeat".

The Social Democrats (SPD) bagged 35.7 percent of the vote, profiting from the disgruntlement felt by voters over the handling of the euro-crisis and the successive bailouts to Greece and other embattled euro countries.

Although general elections are scheduled only for 2013, Sunday's losses, likely to be repeated on 18 September in the city-state of Berlin, are indicative of the dwindling public support for Merkel's successive policy u-turns.

One of those u-turns, on economic governance in the eurozone, has been praised by her long-standing rival and former Social Democratic chancellor Gerhard Schroeder.

In an interview with Der Spiegel, Schroeder praised Merkel for having dropped her opposition to a two-speed Europe and embracing the idea of a "core EU" - that of the eurozone countries.

But this idea is alienating her supporters within the centre-right coalition, as it implies greater economic and fiscal unity at the EU level.

"We do not want a European super-state," said Bavarian Christian-Social Union leader Horst Seehofer, Merkel's ally in the south of the country.

And the bad news from Athens, where the government is struggling to meet the budget deficit targets agreed with the EU and IMF in return for a second €109 billion bailout, is denting Merkel's support further.

Parliamentarians from both the CDU and FDP parties are now openly calling for Greece to exit the eurozone.

Wolfgang Bosbach, a Christian-Democratic MP, told Tagesspiegel newspaper that Athens should consider an exit, because "it cannot expect massive financial support in the long run".

FDP finance expert Otto Solms said much of the same in an interview with the Frankfurter Allgemeine Sonntagszeitung. "It is worth considering whether a default and an exit from the euro don't offer better perspectives for Greece itself and for the monetary union," he said.

The coalition's make or break test will come at the end of this month when the Bundestag votes on extending the powers of the eurozone bailout fund (EFSF) and on the second Greek bailout.

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While the EU's struggles to deal with debt-ridden Greece have been played out in Brussels and in Athens, a new front will open on Tuesday when Germany's top judges consider whether last year's €110bn EU-IMF bailout was legal.

Merkel and Sarkozy plan 'true economic government'

Under pressure to restore confidence in the eurozone, the leaders of France and Germany on Tuesday outlined plans for what they said was true economic governance but shied away from financial measures seen by markets as necessary to stem the euro debt crisis.

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In a tub-thumping speech to the European Parliament in Strasbourg, the president of the European Commission has mounted a blistering attack on the leadership of EU member states in the face of what he called the greatest challenge Europe has faced in its history.

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