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Merkel's Loss of Face

Merkel's Loss of Face
By: Carsten Volkery o



A European economic crisis summit without German Chancellor Angela Merkel? British Prime Minister Brown, French President Sarkozy and European Commission President Barroso say there's nothing odd about Merkel not getting invited to the meeting. German politicians and media disagree.


The German government's spokesman has an answer for everything. The fact that British Prime Minister Gordon Brown and French President Nicolas Sarkozy were meeting for pre-talks about the growing economic crisis in London ahead of a European Union summit was completely normal. Chancellor Angela Merkel's spokesman has been singing the same tune for days.

Nor should it amaze anyone that European Commission President Jose Manuel Barroso was in London on Monday. After all, Barroso had been invited by Brown to a separate economic conference. It would be completely "absurd" to interpret the meeting as a deliberate exclusion of Merkel, government spokesman Ulrich Wilhelm said.

Brown, Sarkozy and Barroso: "Building small groups or circles would lead us down the wrong track."
And yet, the fact that Merkel was exluded from the meeting is difficult to ignore. For days, observers have been wondering whether a rift has opened up within the EU.

Merkel herself hasn't been able to completely ignore the affront. Over the weekend, she had telephone conversations with Brown, Sarkozy and Barroso - her spokesman said they agreed to work closely together. But the face-saving effort came too late. By then, the London summit was being interpreted in the same way in the media across Europe: EU leaders were meeting without "Madame Non", as Merkel has come to be known in the EU, in order to heave the continent out of a recession. She is widely seen as lacking the courage to take decisive action.

Steinmeier: "I Don't Think it Was Nice"

It's an impression that is also held within Merkel's own government - a "grand coalition" power-sharing agreement between Merkel's conservative Christian Democrats (CDU) and the center-left Social Democrats (SPD). Just hours after her spokesman said the chancellor didn't feel excluded on Monday, Frank-Walter Steinmeier - who, in addition to being foreign minister and vice-chancellor, is also the SPD's candidate for chancellor in next year's general elections - said: "I'll be honest, I don't think it was nice that Germany and the chancellor weren't there." He added that it was "inappropriate" for Barroso to attend the meeting without Merkel.

The three men, however, have washed their hands of any guilt. During their joint press conference on Monday, they rejected allegations that they didn't want Merkel at the meeting. Sarkozy said there was no disagreement with Germany. And Brown added that all major EU countries are in agreement. Finally, Barroso rounded things out by insisting that any action in Europe would be unthinkable without Germany.

Find out how you can reprint this SPIEGEL ONLINE article in your publication. All three underscored the fact that they had telephoned with Merkel on Sunday and that they were in agreement with the German chancellor on their analysis of the crisis and their responses. When asked why Merkel hadn't been invited, Brown said that Barroso had been invited in his role as president of the European Commission and Sarkozy in his function as current holder of the rotating EU presidency.

Sarkozy Sparks Resentment in Chancellery

Still, Brown and Sarkozy in particular must have known the meeting would come across as a slap in the face to Merkel. There has been no lack of derogatory remarks within the French government that Berlin is putting on the brakes when it comes to joint responses to the economic crisis. Publicly, Sarkozy has even said, "France is working on it and Germany is thinking about it." The Brits and the French have continued to make headlines with their announcements of ever greater rescue packages and tax gifts, while Merkel and her finance minister, Peer Steinbrück of the Social Democrats, have been tarred both internally and publicly as procrastinators.

The constant nagging is turning into an image problem for the chancellor. Government spokesman Wilhelm countered criticism by pointing out that Germany's economic stimulus package has already been approved, whereas France has only just gone public with its plan. And his response to that pesky London meeting? He uttered a reminder that EU decisions can only be made jointly. "Building small groups or circles would lead us down the wrong track." In other words, nothing can happen without Germany - a lightly veiled warning to EU colleagues who are meeting for their December summit in Brussels on Thursday and Friday.

And Merkel's not the only one who holds a skeptical view of the rush to take action by Sarkozy, Barroso and Brown. Last week, EU finance ministers, led by Steinbrück, dampened their enthusiasm for the high-speed proposals. Financing for the €200 billion EU stimulus package announced by Barroso remains unresolved. And the finance ministers bluntly rejected calls for tax cuts, instead issuing reminders about the euro stability pact and balanced budgets. Now the leaders of the 27 EU member states must find an agreement by the end of the week in Brussels.

Brown and Sarkozy Aren't Role Models

Merkel and Steinbrück have a hard time looking to Brown or Sarkozy as role models. And for good reason: The move to reduce sales tax (VAT) from 17.5 to 15 percent, with which Brown has tried to score points at home for his crisis management, has already emerged to be the equivalent of an own goal. Both British voters and the media are doubtful as to whether the drop in prices will be able to sustainably increase consumer spending. And Sarkozy's economic stimulus program, announced with even greater fanfare, has been derided as being a collection of fictitious transactions.

Nevertheless, the German government is being pressured to act. And during an election year, Merkel can ill afford to be seen as a weak leader.

Considering the dimension of the crisis, it could "eventually become necessary" to pass further economic aid packages, Merkel spokesman Wilhelm said. Indeed, the parties in Merkel's coalition are already whispering that a further economic aid package is inevitable.

Meanwhile, Merkel and Vice Chancellor Steinmeier have sent out invitations for a joint economic crisis summit this Sunday in order to avoid creating the impression that the two politicians - who are running against each other to become Germany's next leader - aren't acting as two separate governments. During the recent crisis at automaker Opel, Merkel invited senior Opel executives to the Chancellery as Steinmeier met separately with representatives of the company's works council
Berlin would like to avoid such errors in the future. Instead, Merkel has called a meeting for next Sunday - at which Steinmeier will be present - which will include a handful of cabinet members, bank managers and other economic experts. Together, the group is to come up with a collective analysis as to what one can expect from the economy in 2009. Before Merkel's government can decide whether to introduce a second stimulus package, government spokesman Wilhelm said, a "solid basis for a decision" is necessary. He said it needs to be clear whether the economic slide is a result of credit shortfalls or because of weak domestic demand.

Steinmeier Campaigns against Merkel

Still, the joint appearances change nothing when it comes to the rivalry between Merkel and Steinmeier. He has slowly begun to ramp up his campaign and on Monday met with representatives of German municipalities. "It is important that the vice chancellor develops his own picture of the situation," explained Jens Plötner, spokesman for the Foreign Ministry.

Indeed, Steinmeier currently enjoys the best of both worlds. Not only can he make headlines on the international stage, but he can operate domestically as vice-chancellor and candidate. In Berlin's Estrel Hotel on Monday, where Social Democrats were gathered to kick off their campaign for European Parliament elections in June, Steinmeier demanded an investment package for German municipalities, states and the nation as a whole. The demand comes on the heels of his support for a "European future package" to protect jobs in the EU. Steinmeier received immediate backing from SPD head Franz Müntefering, who said that German municipalities require annual investments of some €80 billion ($102.6 billion). Current expenditures of just €20 billion a year leave plenty of room for additional state intervention.

But pressure on Merkel's government isn't just coming from the left side of the political spectrum. The Christian Social Union (CSU), the Bavarian sister party to Merkel's CDU, continues to ask for immediate tax cuts.

Chancellor Merkel has called for a governing coalition meeting to be held on Jan. 5 in Berlin. At the gathering, the competing camps will clash and finding a compromise promises to be difficult. Merkel wants to keep as many arrows in her quiver as possible - her re-election campaign, after all, will last until next September. But forecasts currently seem to indicate that she won't be able to wait that long. Economic realities may pressure her into action as early as next spring.,1518,595347-2,00.html


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