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CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

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### Viewing cable 08BERLIN531, GERMAN GRAND COALITION FACES STRAIN OF UPCOMING

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
08BERLIN531 | 2008-04-25 09:09 | CONFIDENTIAL | Embassy Berlin

`

    VZCZCXRO7856
    OO RUEHBW RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
    DE RUEHRL #0531/01 1160925
    ZNY CCCCC ZZH
    O 250925Z APR 08
    FM AMEMBASSY BERLIN
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 1036
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
    RUCNFRG/FRG COLLECTIVE IMMEDIATE

` `

    C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000531

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 04/25/2018
    TAGS: PGOV PREL GM
    SUBJECT: GERMAN GRAND COALITION FACES STRAIN OF UPCOMING
    2009 ELECTIONS

    REF: A. BERLIN 313
         ¶B. 07 BERLIN 0674

    Classified By: Deputy Chief of Mission John Koenig for Reasons 1.4 (b)
    and (d)

    -------
    Summary
    -------

    ¶1. (C)  The German Grand Coalition will increasingly face
    tensions created by the need for the lead candidates to
    position themselves for the 2009 national electoral campaign.
     Chancellor Angela Merkel and Foreign Minister Frank-Walter
    Steinmeier both remain highly popular.  Merkel, however,
    faces political risks if the economy turns for the worse.  In
    the second half of this year, as the Social Democratic Party
    (SPD) moves closer to a decision about its chancellor
    candidate, potential candidate Steinmeier will likely face
    scrutiny and criticism from his own party's left-wing.  It is
    too early to predict the likely coalition outcome in 2009 --
    although Merkel's Christian Democrats (CDU) and the Christian
    Social Union (CSU) are likely to come out ahead, they may not
    have a better coalition option than continuing the current
    Grand Coalition with the SPD.  U.S. foreign policy is not
    likely to play a central role in the campaign leading up to
    Germany's national elections in fall 2009.  Improved
    U.S.-German relations under Merkel and German fascination
    with the vibrant democratic process in the U.S. primary
    elections have played significant roles in improving German
    attitudes towards the U.S., thereby dampening the likelihood
    that the SPD will use anti-American rhetoric to rally voters
    as former chancellor Gerhard Schroeder did in 2002.  End
    summary.

    ---------------------------------------------
    Merkel's Possible Archilles Heel: The Economy
    ---------------------------------------------

    ¶2. (U) Chancellor Angela Merkel (CDU) remains highly popular
    among Germans, who view her as an effective leader with a
    strong international stature.  Her approval rating is 71
    percent.  In large part due to Merkel's popularity, the CDU
    has held a commanding 8- to 14-point lead over the SPD in
    polls over the last year.

    ¶3. (C) Although Merkel's high popularity is expected to
    continue, she faces diffuse risks on economic issues.  CDU
    parliamentarians suggest that an economic downturn would be
    the principal threat to Merkel's high popularity  Economic
    forecasts currently favor Merkel, with projections of 1.6 to
    1.8 percent growth for this year (though slightly lower for
    2009), but with no real evidence of recession despite the
    global slowdown.

    ¶4. (C) Among CDU leaders there is a sense that the CDU may
    have peaked (perhaps too early) and that caution is the
    watchword.  Merkel, who campaigned in 2005 on a program of
    economic liberalization and watched a commanding lead in the
    polls nearly vanish during the campaign, appears to be moving
    toward the political center in an attempt to expand her base
    and consolidate centrist support that the SPD is losing
    because of its leftward shift.  She is demonstrating
    ever-greater focus on domestic policy and espousing popular
    middle class enticements such as pension increases, a longer
    duration of unemployment benefits for older workers, and
    enhancement of nursing care insurance.  While many consider
    this move to be politically smart, some on the CDU's
    right-wing have criticized the Chancellor for abandoning core
    CDU values.

    --------------------------------------------- -----
    Steinmeier Could Get Roughed Up by SPD's Left Wing
    --------------------------------------------- -----

    ¶5. (C) Social Democrats have speculated in recent months that
    SPD Chairman Kurt Beck will eventually defer to the much more
    popular Foreign Minister Frank-Walter Steinmeier as the
    party's eventual chancellor candidate (ref A).  SPD insiders
    consider this a 50-50 proposition.  Kurt Beck's recent
    victory in guiding competing factions of the SPD to agreement
    on privatization of the railway monopoly Deutsche Bahn may
    help shore up his position (septel).  It is uncertain whether
    Steinmeier would choose to accept the SPD nomination at a
    time when the SPD is hovering in the mid 20's in the polls
    and its electoral prospects seem poor.  Note: In any case,
    Steinmeier will run for political office, a federal
    parliament seat from Brandenburg City, for the first time in
    ¶2009.  End note.

    ¶6. (C) Steinmeier would face some detractors in his own

    BERLIN 00000531  002 OF 002

    party.  Deputy SPD Chair Andrea Nahles, the leading left-wing
    critic of Steinmeier's centrist approach, told Political M/C
    that she was unhappy that "the U.S. knows more about
    Steinmeier than I do," referring to Steinmeier's role as
    Chancellery Chief of Staff and Intelligence Coordinator under
    Gerhard Schroeder.  Nahles suggested strongly that the left
    wing of the SPD could portray Steinmeier as too close to the
    U.S. on intelligence-related issues, especially his role in
    the Murat Kurnaz affair (ref B), thereby damaging his
    candidacy.

    ¶7. (C) Nahles admitted, however, that the SPD likely would do
    better at the polls with Steinmeier as chancellor candidate
    (between 30 and 35 percent of the vote).  This would mean
    more SPD parliamentarians holding onto their seats -- a
    consideration that could have an effect on the SPD's choice.
    Nahles added that Steinmeier "has little experience in
    managing the party, but he's a fast learner."

    ----------------------------------
    Grand Coalition Fated to Continue?
    ----------------------------------

    ¶8. (C) Deputy CDU national chairman and Lower Saxony
    Minister-President Christian Wulff (CDU) told the DCM that
    another grand coalition is the most likely outcome in 2009 if
    the political landscape does not change significantly in the
    coming months.  The SPD's Nahles agrees.  While Merkel and
    the CDU still prefer to govern with the Free Democrats (FDP),
    the numbers may not suffice for a majority.  Although
    experiments such as the CDU-Greens coalition in Hamburg are
    enticing, replicating them at the national level remains
    difficult.

    ¶9. (C) Comment:  The CDU's fear of opening up its flanks to
    SPD attacks -- and the SPD's self-obsession during a period
    of turmoil in the party -- reveal a degree of caution on
    policy issues that is remarkable even by German standards.
    This is reflected in German caution on foreign policy issues
    of interest to us such as Afghanistan and Iran.  A particular
    USG concern is whether the SPD or others will try to employ
    anti-American rhetoric to curry voter support, much as former
    chancellor Gerhard Schroeder did in 2002.  Even SPD
    left-wingers like Nahles tell us, however, that foreign
    policy is not as great a consideration for German voters as
    it was around the time of the Iraq war, and therefore will
    not likely be a decisive factor in next year's national
    elections.  It is also important to note that German
    attitudes towards the U.S. have improved over the past year
    due to our improved bilateral relations and German
    fascination with democracy on display in the U.S. primary
    elections.  The current improvement is evidenced by a recent
    Harris poll which showed a dramatic 21 percentage-point
    increase in the number of Germans who regard the U.S. as a
    trustworthy partner.  Also, the German federal election
    campaign will occur during what is expected here to be an
    extended popular "honeymoon" for the new U.S. administration.
     Consequently, German politicians might perceive less
    political advantage in a critical stance toward the U.S.  End
    comment.
    TIMKEN JR

`