The Westerwelle factor

Posted in Europe | 15-Jan-11 | Author: Darrell Delamaide| Source: OMFIF - The Bigger Picture

Merkel's coalition partner weakens hand in euro crisis

Angela Merkel's task in navigating the shoals of the euro crisis hasn't been made any easier by the leak sprung in her coalition with the plummeting popularity of the Free Democrats and their leader, Guido Westerwelle.

Westerwelle is something of an anomaly. He is a deputy chancellor and party leader with little knowledge or interest in economics in the midst of an economic crisis. He is also a foreign minister with little knowledge or interest in foreign affairs. The US ambassador described the FDP leader in one of the Wikileak-ed cables as "incompetent, vain and critical of the United States."

Westerwelle is now the least popular major politician in Germany and in opinion polls the FDP has sunk below the 5% threshold for parliamentary representation. The expectation is that trend will be confirmed in state elections in Baden-W├╝rttemberg in March, jeopardising CDU control in Stuttgart and perhaps enabling an SPD-Green coalition to take power.

Long gone are the days when the FDP under Hans-Dietrich Genscher could get away with taking Germany from a centre-left government to a centre-right government without an election, simply by switching coalition partners. As it is, Westerwelle is not expected to survive as the party's leader if the FDP fails to surmount the 5% threshold in the March state election.

Already the FDP travails have weakened Merkel's political leverage at home. Westerwelle has pledged German support for the euro but has been unbending on bailing out or guaranteeing "profligate" spending in euro area countries.

He backs Merkel in rejecting joint euro bonds as a solution. In a series of interviews last month, he argued that Germany needs to keep control of its own finances and cannot accept a "transfer union" that would give other governments few incentives to save.

For now, however, Westerwelle's main contribution to the deliberations in Berlin is the drain his presence creates on the government's political support.

At its annual conference last week, the FDP swept its leadership crisis under the rug for the moment. But it is sure to resurface at the time of the Baden-W├╝rttemberg elections, with further debilitating effect on Merkel's government, exacerbated by the prospect of six more state elections later in the year.

And who knows just where the euro roller coaster will be then?