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Merkel’s Bavarian Allies Turn Critics on Anti-Crisis Measures

August 06, 2012

Merkel’s Allies Turn Critics on Anti-Crisis Measures

German Chancellor Angela Merkel, center, talks with European Central Bank President Mario Draghi, left, and Italian Prime Minister Mario Monti, right in Brussels on June 29, 2012. Photographer: Bertrand Langlois/AFP/Getty Images

Chancellor Angela Merkel’s Bavarian allies moved to the front line of German criticism of crisis- fighting efforts, berating Greece, Italy and the European Central Bank in a broadside aimed at measures that Merkel backs.

Members of the Christian Social Union, sister party to Merkel’s Christian Democratic Union, called for Greece to be “cut free” from the euro, accused Italian Prime Minister Mario Monti of seeking to access German taxpayers’ money and branded ECB President Mario Draghi’s bond-buying plans a “violation” of the central bank’s rules.

The chorus of criticism from one of Merkel’s two coalition partners underscores the fine line the chancellor must tread to retain support for her anti-crisis efforts going into federal elections in little more than a year. With a Bavarian state vote in September 2013, there’s also a “strong tactical element” to the CSU stance as it uses the crisis to buoy support, said Gero Neugebauer, a politics professor at Berlin’s Free University.

“The CSU has the capacity to hurt Merkel without over- turning her policy,” Neugebauer said yesterday in a telephone interview. “But the CSU instinctively knows it can only go so far in sawing the branch it sits on. Bavaria does extremely well out of the euro: Think BMW, Siemens (SIE), EADS.”

Germany’s political parties are sharpening their profile before national elections in the fall of 2013 that Merkel has said will be fought on the euro crisis. With the chancellor and Finance Minister Wolfgang Schaeuble on vacation, the CSU has filled the vacuum with comments on crisis policy.

Make an Example

Markus Soeder, Bavarian finance minister and a CSU member, told Bild am Sonntag newspaper on Aug. 5 that “an example has to be made of Athens,” by casting it out of the euro. “The Germans can no longer be the paymaster for Greece” and it’s important Spain and Italy see what happens if countries don’t repay their debts, the newspaper cited him as saying.

Alexander Dobrindt, CSU general secretary, said comments made by Monti in this week’s Der Spiegel magazine calling for governments to implement crisis-fighting steps without constant recourse to parliament were an “attack on democracy,” according to an interview with the Rheinische Post newspaper.

CSU lawmaker Hans Michelbach, the ranking CDU/CSU member of parliament’s finance committee, followed up yesterday by demanding that Draghi spell out his bond-buying plans. In the past week, Michelbach has called for ECB voting rules to be overhauled to reflect a country’s share of liabilities; urged a ban on ECB bond purchases; and rejected granting the permanent euro rescue fund access to ECB liquidity via a banking license.

‘Abusing’ Mandate

“Taxpayers have a right to know which risks the ECB has already heaped up in abusing its mandate,” Michelbach said in an e-mailed statement. “Draghi needs to open the books.”

Merkel’s government closed that particular line of criticism, with spokesman Georg Streiter telling reporters in Berlin yesterday that she backed Draghi’s proposal on bond buying in tandem with the European rescue fund. She has also consistently said she wants Greece to stay in the euro.

Frank-Walter Steinmeier, parliamentary leader of the main opposition Social Democratic Party and former foreign minister in Merkel’s first-term government, called on the chancellor to put an end to this “irresponsibility coming out of Bavaria,” Deutsche-Presse Agentur cited him as saying in Berlin yesterday.

Bavaria Polls

Support for the CSU was 43 percent in a July 4 Forsa poll for Stern magazine, almost double the 23 percent of its nearest rival, the Social Democratic Party. While that’s comparable with the last election in 2009, that result cost the CSU its 46-year absolute majority in the state and forced it into a coalition with the Free Democratic Party.

Since then, FDP support has collapsed below the 5 percent threshold needed to win parliamentary seats, meaning the CSU may have to court the Freie Waehler, or Free Voters, a euro-skeptic party that has opposed rescues for Germany’s European neighbors.

“Merkel’s CSU allies have started braying from Bavaria, bathing in the luxury of being a junior coalition party that can get away with sniping at debt policy,” Irwin Collier, a political scientist at the John F. Kennedy Institute of the Free University, said in an interview. While it probably won’t draw a response from Merkel, “it won’t go away either, as electioneering becomes a new factor she needs to contend with.”

To contact the reporters on this story: Brian Parkin at bparkin@bloomberg.net; Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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