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Germany

Analysis: Merkel Feels First Real Heat over Poor Economy

For the first three years of her chancellorship, Angela Merkel could do no wrong. But she's now under attack from all sides for not doing enough to combat the effects of the global economic crisis on Germany.

Merkel speaking at the Conservatives' party conference

Merkel's cautious approach isn't playing well at home or abroad

From high-brow to low-brow, no one in the German media has much good to say right now about the country's once-beloved conservative chancellor.

The cover of this week's Der Spiegel, Germany's most respected weekly news magazine, features a dowdy-looking Merkel against an ominous backdrop of grey-brown abstract gloom. The headline reads "Angela Cowardly."

And the lead article minces no words about what the magazine considers Merkel's lack of direction amidst.

"Nowhere can one see an ambition to lead, neither in Germany not in Europe nor in the world," writes the small phalanx of authors involved in the article. "The world is waiting for Barack Obama, Europe is looking toward Nicolas Sarkozy, and in Germany doubts are growing as to whether Merkel's crisis strategy is even adequate."

Germany's most widely read tabloid newspaper Bild was, true to form, much more bluntly populist in its lead story on Wednesday, December 3, calling on Merkel's grand coalition to get off their fannies.

"Hurry up lower taxes!" Bild exclaimed. "We're tired of all the excuses."

It's an extraordinary turnaround for a chancellor who recently enjoyed record levels of popular approval. In the space of a few weeks, Merkel has gone from everybody's darling to everyone's favorite scapegoat.

Stuck in first gear

Merkel in a red Ford

Critics say Merkel is avoiding the driver's seat

Ironically, Merkel's biggest liability now is the low-key leadership style that previously made her so popular both in Germany and abroad.

Named by Forbes Magazine as the world's most powerful woman in each of her three years in office, Merkel built her reputation mostly in the realm of foreign policy.

Whether she was easing tensions with the US caused by Germany's non-participation in the Iraq War, getting the leaders of the G8 to agree on measures to protect the climate or negotiating the Lisbon Treaty to skirt the EU's constitutional dilemma, the chancellor radiated a calm, reassuring, prudent competence.

Her main domestic achievement, together with her junior coalition partners the Social Democrats, was a balanced budget 2008 -- Germany's first in years.

But the public isn't bothered about balance sheets any more. What people want are dramatic rescue plans to jolt the economy into high gear. And the modest collection of infrastructural investment projects and relief from taxes on new cars put forward by Merkel's government for 2009 simply doesn't fit the bill.

Opposition renaissance

Merkel with a robot

The Chancellor needs all the friends she can get

For the past three years, Germany's opposition parties -- the Greens, the Left Party and the pro-business Free Democrats -- seemed close to irrelevant. But they reemerged during last week's parliamentary budget debates with stinging force.

The Greens mocked Merkel's alleged hesitancy within the EU, calling her "Madame Non." The Left Party thundered that she needn't have bothered with her education initiative if she wasn't willing to incur deficient spending to better fund schools.

And the FDP complained that, by refusing to consider tax cuts, Merkel's cabinet was bucking accepted economic wisdom in Europe and the US and making Germany into a freakish outsider.

She's drawn equally poor reviews from foreign observers.

In an article entitled "Where's Angela?" the British Economist dubbed her "invisible," while Italy's La Stampa characterized her as "fearful and as though ossified."

What looked like prudence in a better economic environment is now being excoriated as paralysis.

Image matters

French President Nicolas Sarkozy shows the way to German Chancellor Angela Merkel

Sarkozy is seen to be taking the lead in Europe

Truth be told, no one knows whether the massive stimulus initiatives envisioned by Barack Obama, Gordon Brown and Nicolas Sarkozy will do any good -- or whether, conversely, Merkel isn't right to take a tinker-here-and-there-and-ride-it-out approach.

Those three leaders are, however, at least being perceived as tackling the recession in their countries head on. And if one thing has become apparent this fall and winter, it's that economic perceptions and economic reality are inseparable.

Germany may be in a particularly tricky position because, among the world's larger economies, it is conspicuously dependent on exports and thus on the existence of prosperity abroad.

Merkel's strategy of prudence, if not hesitancy may be a tacit acknowledgement of that dependence, but she still needs to advance positive arguments for the course she's chosen.

Otherwise, in Germany's general elections next year, the chancellor may pay the price for fretting about debt while others were getting the lead out.

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