Disagreements on tax, Afghanistan and with her conservative base upset Merkel's second term

A cover feature in Time magazine called her the most powerful leader in Europe but Angela Merkel has had a bumpy ride since ending her grand coalition with the leftist SDP and forming a coalition with the libertarian FDP.

Five observations:

Opinion polls show that the German public are unhappy with her start to her second term: "The German public television channel ARD last week published its monthly poll showing falling public support for Mrs. Merkel. The ARD poll found that support for Mrs. Merkel had dropped 11 percent from the previous month, with 59 percent saying that they were satisfied with her performance. This was her lowest rating since December 2006 and the biggest one-month drop for a German chancellor in seven years. And it was a considerable plunge for Mrs. Merkel since public support had been remarkably high and consistent over the past three years. The ARD polls also found that 77 percent of those asked were not satisfied with Mrs. Merkel’s second term, mainly because of the divisions and squabbles." (New York Times and Wall Street Journal).

Her new coalition is split between deficit hawks within her own party (led by Finance Minister Wolfgang Schäuble) and supply-siders within the FDP: "The main sticking-point is a dispute over tax cuts between Ms Merkel’s Christian Democratic Union (CDU) and her junior coalition partner, the liberal Free Democratic Party (FDP). The FDP wants to reduce taxes by almost €20 billion ($29 billion) next year and believes that it was promised this much when it agreed to join the ruling coalition. But fiscal conservatives within the CDU and its Bavarian sister party, the Christian Social Union, fret more about bringing back into balance a budget deficit that may reach as much as 6% of GDP this year." (Economist and FT).

In two other areas of tension the FDP support EU membership for Turkey and oppose more troops for Afghanistan: "Westerwelle opened up a can of worms by raising the controversial issue of Turkey's E.U. membership bid while on a trip to Ankara. The Foreign Minister voiced support for the country's accession talks — stalled for years by opposition from Germany and France — by saying it was in Germany's interests to forge close links between Turkey and the E.U. The CSU hit back immediately by reiterating its opposition to Turkey's E.U. membership, saying it was ready to offer a "privileged partnership" to Ankara instead... Merkel is also coming under increasing pressure from the U.S. and its NATO allies to outline her position on increasing Germany's troop levels in Afghanistan ahead of an important Afghan conference in London on Jan. 28... But the CDU's partners are split over whether to send more. According to media reports, Westerwelle is opposed to a troop increase and would rather focus on efforts to train the Afghan police." (Time Magazine).

Within her own party, Merkel is under pressure to deliver a "purer CDU": "The Frankfurter Allgemeine Sonntagszeitung newspaper published an open letter signed by four regional CDU parliamentary leaders that said that Merkel owed her electoral victory to luck rather than a convincing campaign strategy and that the CDU had lost touch with its core supporters. The letter also stressed that Merkel's main priority should be to "win back the conservative and economic liberal voters." Analysts say that conservative leaders disliked the CDU's swing to the center of the political spectrum when Merkel led the country in partnership with the Social Democrats from 2005 until September 2009, and want the party to shift back to its traditional Christian roots. The CDU governor of Saarland, Peter Müller, confirmed just as much when he told the Handelsblatt newspaper that there should be a more "pure CDU" now." (Time Magazine and FT).

The recently-divided Left may be about to unite again: Angela Merkel's greatest asset has been deep divisions on the German Left. The news that the firebrand leader of Die Linke party, Oskar Lafontaine, is stepping down opens the way for the parties of the Left to join forces. (More in the Independent).