(Updates with analyst comments from fourth paragraph. See EXT4 for more on the euro-area debt crisis.)
Feb. 8 (Bloomberg) -- Support for German Chancellor Angela Merkel’s party bloc rose to the highest since before her re- election in 2009, pointing to voter backing for her handling of the European financial crisis.
Merkel’s ruling Christian Democrats rose two percentage points to 38 percent, the highest approval rating since August 2009, in the weekly Forsa poll published today. The Free Democrats, Merkel’s junior coalition partner, were stuck at 3 percent and the Social Democrats, the main opposition party, were unchanged at 27 percent.
Merkel’s ratings have jumped since December as she led the drive to lock in euro-area budget discipline while resisting calls to provide more public money to fight the debt crisis. It’s a reversal after Germans’ anger at bailouts for Greece, Ireland and Portugal sent support for her bloc to 29 percent in the fall of 2010 and helped defeat the Christian Democrats in state elections last year.
“Germans like that she continues to be seen as tough on Greece while managing to get all the other euro countries on board,” Christian Schulz, an economist at Berenberg Bank in London, said by phone. “Italy, Greece, Spain, Portugal -- all these countries are moving into a German direction.”
Merkel’s revived popularity as unemployment declined to a two-decade low is drawing voters to her party and away from the Free Democrats and Greens, who declined two percentage points to 13 percent, Stern magazine and broadcaster RTL cited Forsa head Manfred Guellner as saying in a statement. The Pirate Party and the anti-capitalist Left were unchanged at 7 percent and 8 percent, respectively.
‘Boom in Employment’
Germans credit Merkel with shielding them from the debt crisis as “people have a feeling that there’s no end to this boom in employment,” Schulz said. German business confidence jumped to the highest in five months in January even as the European Commission predicts the 17-nation euro area may tip into recession.
The benchmark DAX stock index has advanced 15 percent so far this year compared to a 9 percent gain in the Euro Stoxx 50 gauge.
“The good economy is cheering voters and Merkel and her party are the beneficiaries,” Ulrich Deupmann, a partner at public-relations firm Brunswick Group Inc. in Berlin and biographer of German Finance Minister Wolfgang Schaeuble, said in an interview.
Short of Majority
Even so, the Jan. 30-Feb. 3 poll of 2,500 people suggests Merkel’s coalition wouldn’t have a governing majority if elections were held now. Neither would the Social Democrats and Greens, who governed Europe’s biggest economy between 1998 and 2005. The poll has a margin of error of as many as 2.5 percentage points.
Merkel, in remarks to business students late yesterday in Berlin, restated her determination to avoid a breakup of the euro while insisting on spending cuts, debt reduction and steps to boost competitiveness in the region’s weaker economies.
As Greek Prime Minister Lucas Papademos seeks to secure an agreement on a debt writedown and the country’s second financial aid package, Merkel said “there is no way around” the country’s economic overhaul. Yet a Greek exit from the euro area would have an “incalculable” impact, she said.
--Editors: James Hertling, Leon Mangasarian
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