Merkel: German govt coalition will survive

By Geir Moulson

Associated Press

Published: Monday, Sept. 19 2011 6:42 a.m. MDT

German Chancellor and Chairwoman of the German Christian Democrats, CDU, Angela Merkel, reacts at the beginning of the party's weekly executive committee meeting in Berlin, Germany, Monday, Sept. 19, 2011. A senior ally of Chancellor Angela Merkel said Germany's troubled government will survive and keep working together to resolve the eurozone debt crisis despite a state election wipeout for her junior coalition partner. Merkel's Christian Democrats performed respectably in Sunday's election in Berlin but their junior partner, the Free Democratic Party, lost three-quarters of its support.

Michael Sohn, Associated Press

BERLIN — Leaders of Chancellor Angela Merkel's coalition vowed Monday to stick together following a state election wipeout for the troubled government's junior partner, but tensions over the eurozone debt crisis persisted.

Sunday's election in Berlin was the last of seven this year, most of which have gone badly for Merkel's center-right coalition. It followed a week of internal squabbling over the debt crisis that prompted speculation the coalition could collapse before a national election is due in 2013.

"I think we will continue our work in the government and I don't think anything will become more difficult," Merkel insisted.

"I have no doubt that we will deal with the tasks we have to deal with," she added. "What's been said has been said, but there's no question of that meaning we can't work sensibly together any more."

Merkel's Christian Democrats performed respectably in Berlin, posting modest gains. But their junior partners, the Free Democrats, lost three-quarters of their support and were ejected from a state legislature for the fifth time this year. They have taken much of the blame for long-running friction in the government.

Last week, the Free Democrats' leader Vice Chancellor Philipp Roesler talked openly about the possibility of an eventual "orderly insolvency" for Greece.

The comments ignited market fears and irked Merkel. Roesler ignored heavy hints from the chancellor that he should drop the subject.

That prompted new doubts about the future of her coalition government, which has developed a reputation for incessant infighting since taking power in late 2009. The Free Democrats' demands for tax cuts, in particular, have been divisive in the coalition, turning off voters.

"The euro debate was not a decisive issue, except for those who abused it," said Frank Henkel, the lead candidate in Berlin for Merkel's party. "Populism has been punished."

Federal conservative politicians were more diplomatic — Merkel suggested that it was the fault of the Free Democrats' local branch, rather than her government colleagues, that the crisis became a campaign issue. But she also pressed home her insistence that loose talk is dangerous.

"I think that, in dealing with the euro crisis, we have to weigh our words very carefully," she said. "I stand by the sentence, 'if the euro fails, Europe fails.'"

Roesler defended his party's right to "do what it believes is right" but also said it was important to "work together in a friendly manner with its coalition partners."

He said that the coalition partners could still "govern well together" and "we will for the next two years."

Germany's main opposition Social Democrats won the Berlin election, with popular Mayor Klaus Wowereit securing a third term.

The center-left party says it will support Merkel's efforts to stem the debt crisis, but has made clear that if the government fails it wouldn't be prepared simply to enter a coalition with the chancellor without fresh elections.

"The chancellor leads a government that lost again yesterday, and the chancellor clearly has a state of emergency in her government," SPD leader Sigmar Gabriel said.

"We want to contribute to getting through the European crisis in a stable way, but we can't do anything to stabilize this government."

Carsten Brzeski, an economist with ING, said the government looks likely to get through upcoming parliamentary votes on expanding the eurozone rescue fund, but the Free Democrats' desperation could have longer-term fallout.

"A more vocal controversy on the German government's future course in the sovereign debt crisis looks probable," he said.

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