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### Viewing cable 09BERLIN1176, MERKEL VS. STEINMEIER? WHAT DO THE GERMAN

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
09BERLIN1176 | 2009-09-22 13:01 | CONFIDENTIAL//NOFORN | Embassy Berlin

`

    VZCZCXRO1354
    PP RUEHAG RUEHROV RUEHSL RUEHSR
    DE RUEHRL #1176/01 2651345
    ZNY CCCCC ZZH
    P 221345Z SEP 09
    FM AMEMBASSY BERLIN
    TO RUEHC/SECSTATE WASHDC PRIORITY 5271
    INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
    RUCNFRG/FRG COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHINGTON DC PRIORITY
    RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

` `

    C O N F I D E N T I A L SECTION 01 OF 06 BERLIN 001176

    NOFORN
    SIPDIS

    STATE FOR EUR/CE, INR (KEETON)
    TREASURY FOR ICN (KOHLER)
    NSC FOR JEFF HOVENIER

    E.O. 12958: DECL: 09/22/2019
    TAGS: ECON EFIN EINV ENRG ETRD GM KJUS PGOV PREL
    PTER, SENV
    SUBJECT: MERKEL VS. STEINMEIER? WHAT DO THE GERMAN
    ELECTIONS REALLY MEAN FOR U.S. INTERESTS?

    REF: A. BERLIN 32
         ¶B. BERLIN 1002
         ¶C. BERLIN 1136
         ¶D. BERLIN 1138
         ¶E. BERLIN 1162

    Classified By: MINISTER COUNSELOR FOR POLITICAL AFFAIRS GEORGE GLASS FO
    R REASONS 1.4 (B) and (D)

    SUMMARY
    -------

    ¶1. (C/NF) This is not a "change" election.  The German public
    does not see the September 27 parliamentary elections as
    decisive, and on many foreign policy fronts, including
    Afghanistan, arms control, and Russia, we do not foresee
    significant or distinct policy differences between the two
    most feasible coalition options.  The most likely results of
    the elections are a CDU/CSU-FDP (black-yellow) coalition or a
    continued CDU/CSU-SPD Grand Coalition.  However, in some
    areas there may be changes, including on Iran, tax policy,
    and nuclear energy.  More importantly, there may be a new
    foreign minister who will likely need to get up to speed
    quickly on such crucial issues as Iran, Afghanistan, and
    NATO's strategic posture.  Leaders from the CDU/CSU and FDP
    promise a government more friendly toward the United States.
    The near certainty that Angela Merkel will remain chancellor
    argues for this, but the unpredictability of Foreign
    Minister-aspirant and FDP Chairman Guido Westerwelle may call
    for focused diplomatic engagement with the new FDP political
    actors (see REFTEL E for Post's comprehensive expose of
    Westerwelle).  END SUMMARY.

    BLACK-YELLOW (CDU/CSU-FDP)?
    ---------------------------

    ¶2.  (C/NF) It is virtually certain that Angela Merkel will
    retain her position as Chancellor after this Sunday's
    elections.  But it is impossible to predict the final
    composition of the next coalition given that about a third of
    the electorate is still undecided and the polls show only a
    narrow parliamentary majority for black-yellow.  Chancellor
    Merkel has repeatedly voiced her preference for a
    black-yellow coalition and has promised to form one even with
    a one-vote parliamentary majority.  The FDP's Westerwelle has
    echoed this sentiment as its first choice as well.

    ¶3.  (C/NF) The SPD has almost no prospect of leading a
    government and is only likely to remain in power as a
    weakened junior partner in another Grand Coalition, should
    the CDU/CSU-FDP come up short of a parliamentary majority.
    The SPD has failed to gain much momentum, although it has
    more recently risen a couple of points in the polls.  It
    continues to suffer from an inability to profile itself
    against the CDU (or even a lack of desire to break with the
    CDU in any significant way), with which it has been in
    government for the past four years.  Also unhelpful have been
    a string of losses in local, state, and the June European
    Parliament elections.

    ¶4.  (C/NF) U.S. interests will not only be affected by the
    composition of the next coalition but also which parties are
    in the opposition.  A CDU/CSU-FDP coalition would bring to
    power a new set of top players at the Ministry of Foreign
    Affairs, Justice, Environment, and at either Economics or
    Finance (as well as probably at least one other FDP-led
    ministry with some turnover in CDU/CSU ministries as well).
    The extent to which policy will change is less obvious,
    however, because FDP Chairman and Foreign Minister aspirant
    Guido Westerwelle has promised considerable continuity with
    Steinmeier's approach to foreign policy.  In addition, the
    FDP's economic reform goals will face considerable resistance
    from the Bavarian CSU as well as parts of the CDU.  The lack
    of coordination and consistency, including between the
    Chancellery and MFA, that often occurs in German policy
    making will continue to be a challenge for the United States.

    ¶5.  (C/NF) A black-yellow coalition will face a more united
    opposition led by an SPD that is likely to move left if it
    leaves government and seeks to profile itself against the
    Greens and the Left Party, based on the profiles of SPD
    leaders waiting in the wings for Steinmeier and SPD Chairman

    BERLIN 00001176  002 OF 006

    Franz Muentefering to leave.  German governments can operate
    with narrow majorities due to strict party discipline (which
    gets stricter the narrower the majority), but Merkel has not
    shown much courage in using her considerable personal
    popularity to push through policies that lack public support.
     On Afghanistan, in particular, a black-yellow coalition may
    seek to simply roll over the ISAF mandate unchanged when it
    comes up for renewal in December, rather than risk a row in
    the Bundestag over an increase in the troop ceiling, which
    the Defense Ministry has concluded is necessary to deal with
    the growing insurgency in the German north.

    OR GRAND COALITION (CDU/CSU-SPD)?
    ---------------------------------

    ¶6.  (C/NF) However, another Grand Coalition cannot be
    discounted, even though nobody professes to want it.  It is a
    historical fact that the center-right parties have not won a
    parliamentary majority since 1994.  Another Grand Coalition
    would almost certainly be even more difficult for the CDU/CSU
    and the SPD than the current one since both parties would be
    eyeing each other with distrust and the expectation that the
    government may not last an entire term.  Further, Merkel's
    position within her party would be weakened by what would be
    viewed as her failure to achieve a coalition with the FDP
    while the Free Democrats would continue to take advantage of
    conservative dissatisfaction with the Grand Coalition's
    disgruntled CDU voters.

    ¶7.  (C/NF) The SPD leadership might be secretly relieved not
    to lose their government posts, but its continued partnership
    with the CDU/CSU would likely cause further bleeding of the
    party's more leftist supporters to the Greens and Left Party,
    further weakening its base.  In addition, the SPD left-right
    split might be exacerbated, with leftists tempted to
    prematurely rupture the Grand Coalition to build a majority
    red-red-green government where the SPD would hold the
    chancellorship.  CDU officials certainly believe -- and have
    told the Embassy -- that they expect the SPD would seek to
    replace a Grand Coalition with a red-red-green one some time
    during the term.  Even though Steinmeier has insisted that
    any coalition agreement would be for the entire legislative
    period, the distrust between the parties would remain.  Plus,
    if the SPD performs badly in the election, Steinmeier
    literally may no longer be in a position to keep his word.

    GERMANY'S NEXT FOREIGN MINISTER - WESTERWELLE OR STEINMEIER?
    --------------------------------------------- ---------------

    ¶8.  (C/NF) The election's most obvious impact on bilateral
    relations will be in terms of a potential change in foreign
    ministers.  Our extensive experience with Steinmeier allows
    us to comfortably predict how a Steinmeier-led MFA would
    pursue German interests globally, and vis-a-vis the United
    States.  On the other hand, Westerwelle continues to remain
    an enigma who has been unable to establish himself as a
    significant voice on foreign affairs.  The FDP's foreign
    policy spokesman Werner Hoyer -- a well known foreign policy
    analyst in Germany and internationally, including in the
    United States -- has taken the lead here.  When we asked
    Hoyer this week what would change with Westerwelle, he
    struggled to say anything.  Westerwelle is a domestic
    political animal with little appetite for foreign policy and
    international affairs.  He will, therefore, continue to be
    dependent for foreign policy advice on his mentor, former
    Foreign Minister Hans-Dietrich Genscher as well as on Hoyer
    and whichever Ministry diplomats gain his trust (REFTEL E).

    ¶9.  (C/NF) Westerwelle's attempt to position himself among
    Germany's foreign policy elite with a speech in May at the
    German Foreign Relations Council (DGAP) did not produce the
    intended results and instead revealed his limitations on such
    major issues as Middle East peace.  If Westerwelle becomes
    Germany's next foreign minister, his learning curve will be
    steep.  Germany's small foreign and security policy elite --
    already skeptical of Westerwelle -- will resent his rise into
    the second most powerful political office of the land.  And
    we will be faced with the question of how best to approach
    someone who has clearly had a mixed relationship with the
    United States.  Despite Westerwelle's praise and respect for
    the current Obama Administration, we should not forget that,
    as part of the opposition, he has criticized the United
    States for the last eight years, while at the same time

    BERLIN 00001176  003 OF 006

    offering very few ideas of his own on how to solve
    international problems (see REFTEL E).

    ¶10.  (C/NF) If Steinmeier is able to lead the SPD to a strong
    enough showing to force a Grand Coalition, he certainly could
    maintain his position as Foreign Minister.  He would also
    have the increased political clout provided by a mandate in
    the Bundestag and his success in blocking a CDU/CSU-FDP
    coalition.  Obviously, there would be a high degree of
    foreign policy continuity.  Unlike Westerwelle, Steinmeier is
    already on board with both sides of the U.S. approach to
    Iran, and he has told the Ambassador that he supports
    additional sanctions should Tehran fail to respond to U.S.
    overtures.  However, competition between Steinmeier and
    Merkel over control of foreign policy will not end with the
    election, and Steinmeier would likely try to focus on a few
    key issues where he could differentiate himself and his party
    from Merkel and the CDU, with arms control, Afghanistan, and
    Russian relations being likely choices.  Steinmeier wants to
    work closely with Washington on these issues and is less
    likely to surprise Washington than the Chancellery would be.

    ¶11.  (C/NF) The goodwill that marked the first year of the
    Grand Coalition is unlikely to be repeated in a second term,
    particularly as Steinmeier contends with those in his own
    party who would prefer a leftist coalition.  If there is not
    enough support for a CDU/CSU-FDP coalition, then there would
    likely be a numerical red-red-green majority in the
    Bundestag.  The strained communication that currently marks
    Chancellery-MFA relations is likely to continue.  Both
    Steinmeier and Merkel are responsible realists, however, who
    understand the need to work together on the big issues, as
    was evident during the Russian invasion of Georgia, their
    approach to the Middle East, and their reaction to the
    international financial melt down.  If new crises arise, the
    two are likely to continue to put their own interests aside
    long enough to speak with a single voice.

    FOREIGN POLICY ISSUES IN BLACK-YELLOW AND GRAND COALITIONS
    --------------------------------------------- -------------

    ¶12.  (C/NF) AFGHANISTAN (Some Change): Westerwelle is one of
    the few German politicians who justifies the Afghanistan
    deployment on the basis of "German national security
    interests" and the FDP as a whole has been a consistent
    supporter of the ISAF mandate.  But with only a narrow
    majority in the Bundestag and facing an SPD opposition ready
    to accuse them of militarizing the German mission, a
    CDU-CSU/FDP coalition ironically might be less willing (and
    able) to push through necessary troop increases than a Grand
    Coalition.  On the other hand, there is likely to be no
    difference between the two on the support for police
    training, economic assistance and other civilian aid.

    ¶13.  (SBU) ARMS CONTROL/NONPROLIFERATION (Little change):
    Westerwelle proudly says that the motto of the MFA under his
    leadership will be "peace through disarmament," thereby
    seeking to be even more pro-arms control than Steinmeier.
    Although Westerwelle has called for the removal of all U.S.
    tactical nuclear weapons from German soil by 2013, it is
    questionable whether he will manage to include this in a
    coalition agreement with the CDU/CSU given their likely
    resistance.

    ¶14. (C/NF) RUSSIA (No change): Like the SPD, the FDP sees
    Russia as a "strategic partner" in addressing issues such as
    Iran, energy, and Afghanistan and believes engagement and
    assistance with modernization is the best way to address
    Russia's democratic deficits.  Like Merkel and Steinmeier,
    Westerwelle has pursued close ties to Russian leaders,
    including Foreign Minister Lavrov and Defense Minister
    Ivanov, both of whom gave him high-profile meetings in Moscow
    this past spring.

    ¶15. (C/NF) IRAN (Some change): Steinmeier has been a steady
    supporter of US policy toward Iran -- both in terms of
    dialogue and the need for increased sanctions if necessary,
    while Westerwelle has spoken almost exclusively about the
    need for dialogue.  In addition, Westerwelle's FDP's
    pro-business orientation makes it particularly skeptical of
    sanctions and is also resistant to unilateral efforts to cut
    back trade.  Merkel will likely have to take a stronger role
    in this issue to keep Germany's position from falling back to

    BERLIN 00001176  004 OF 006

    the least common denominator.

    ¶16.  (C/NF) TURKEY (Some change): A black-yellow coalition
    may result in a subtle, less favorable, shift in Germany's
    policy towards Turkey with the exit of the SPD -- Turkey's
    staunchest supporter -- from the government.  Although FDP
    foreign policy experts recognize that EU membership is an
    important factor in encouraging additional domestic reforms
    in Turkey, it has kept an open mind on the issue.  However,
    the FDP is more vocal than the SPD in its criticism of
    Turkey.

    ¶17.  (C/NF) MIDDLE EAST (Little change): Westerwelle's views
    on Israel and Middle East peace may stem more from his past
    experience in addressing criticism against Israel and his
    interpretation of Germany's historical role toward Israel
    than from his own Middle East policy or strategic
    calculations.  Some attribute Westerwelle's current
    pro-Israel stance as the result of his having been burned
    politically both domestically and in Israel in 2002.  At that
    time, Westerwelle defended an FDP politician, Juergen
    Moellemann, who had published a brochure strongly critical of
    then Israeli Prime Minister Ariel Sharon's actions towards
    the Palestinians.  Some claimed the brochure was
    anti-Semitic.  While in Israel shortly thereafter,
    Westerwelle was questioned by then-PM Sharon about what
    Sharon referred to as a growing anti-Semitism in Germany and
    Europe.  In an August 2009 interview with "Der Spiegel,"
    Westerwelle explained his decision to vote against Germany's
    participation in UNIFIL with his view that Germany cannot
    take a neutral position in the Middle East because of its
    past.  He noted that he had visited the Golan Heights in
    Israel as a young man and was impressed with the
    vulnerability of the country.  Even more so than Steinmeier,
    however, Westerwelle may seek a greater role for Germany and
    the EU in the Middle East.  In the "Spiegel" interview, he
    called for the EU to launch an initiative to establish a
    conference for security and cooperation in the Middle East.
    We could expect both Steinmeier and Westerwelle to hold to
    U.S. messages on the Middle East, with both competing with
    the Chancellery for the lead on this issue.

    ¶18. (C/NF) GUANTANAMO (No change): Steinmeier would likely
    take a more accommodating approach toward Germany accepting
    some of the Guantanamo detainees than would Westerwelle, but
    the key ministry in deciding this issue will continue to be
    Interior.  In either a black-yellow or another Grand
    Coalition, Wolfgang Schaeuble (CDU) could continue on as
    Interior Minister, although there is some talk of his being
    named as EU commissioner.  Schaeuble has been very skeptical
    of accepting detainees from a security standpoint.  More
    recently, he told the Ambassador that Germany would only take
    detainees who will require no surveillance.

    ¶19. (SBU) ECONOMIC CRISIS/INTERNATIONAL FINANCIAL REGULATION
    (Little Change): All potential government parties share a
    similar strategy; increase regulation and supervision of the
    financial sector with differences at the margin.  The SPD
    advocates taxing share trades over 1000 euros and monitoring
    private equity funds more closely, while the CDU/CSU and FDP
    propose concentrating financial supervision under the
    Bundesbank.  A black-yellow government would result in a new
    Finance Minister; if Karl Theodor zu Guttenberg remains at
    the Economics Ministry, then the FDP might be given the
    Finance Minister, with Hans-Otto Solms, an experienced and
    cautious financial policy expert, the most likely replacement.

    ¶20. (C) CLIMATE CHANGE (No Change): There is little
    difference between the parties on issues in play at the
    upcoming UNFCCC's COP-15 in Copenhagen, and Merkel maintains
    strong control over German policy in this area.  There will
    be a new Environment Minister should a black-yellow
    government be formed, however, and it is unclear which party
    would then control the Ministry.  In previous CDU/CSU-FDP
    coalitions, the CDU ran it but if the FDP does as well as
    current polls suggest, it might make a play for the Ministry.
     Current SPD Environment Minister Sigmar Gabriel has had a
    high profile in his party's Bundestag campaign and could
    remain in place in a Grand Coalition.

    ¶21. (C) ENERGY (Some Change): The SPD insisted on
    continuation of the previous government's plan to phase out
    nuclear power plants during the last coalition negotiations

    BERLIN 00001176  005 OF 006

    and would stick to this position again.  In contrast, the FDP
    has been the party most open to nuclear energy, insisting
    that the phase-out itself should be at least slowed down to
    protect Germany's supply of energy.  The CSU/CSU also wants
    to extend the possible life of existing nuclear power plants,
    provided they are safe, during a "transitional" period to
    provide time for Germany to switch to greater reliance on
    renewable sources.  Recent controversies over the safety of
    some nuclear power plants have made Merkel and even the FDP
    less willing to press for reliance on nuclear energy.

    ¶22. (C/NF) DATA PROTECTION (Little Change): Data privacy has
    been a second-tier campaign issue but does arise in debates
    on domestic security policy.  Another Grand Coalition could
    leave Justice Minister Brigitte Zypries (SPD) in place; she
    reluctantly agreed to the landmark data sharing initiative on
    serious crime and terrorism suspects (the Pruem-like
    agreement) due to privacy concerns.  A CDU/CSU-FDP coalition
    might return Sabine Leutheusser-Scharrenberger to the Justice
    Ministry, which she headed from 1992-96 in the last
    black-yellow coalition (she resigned her office after the her
    party agreed to wiretapping legislation proposed by the
    CDU/CSU).  She or any FDP Justice Minister would likely
    continue to see their role as the protector of civil
    liberties and therefore they would carefully scrutinize all
    bilateral and U.S.-EU data sharing initiatives.

    ¶23. (C/NF) COUNTER-TERRORISM/LAW ENFORCEMENT (Little change):
    The CDU will likely remain in control of the Interior
    Ministry regardless of the coalition, and Schaeuble, although
    67, is likely but not certain to stay on for another term.
    He has brought U.S.-German CT cooperation to an unprecedented
    level, and no other German official has offered as much
    cooperation (except on the issue of resettling Guantanamo
    detainees where the focus on internal German security
    supersedes his desire to work with Washington).  Any possible
    replacement -- Chancellery Chief Thomas de Maiziere has been
    mentioned in the press -- is unlikely to have his authority
    or expertise but will likely continue his policies.

    ¶24. (U) TRADE (No change): All five parties are committed to
    open market but the SPD, Greens, and The Left Party want
    environmental and social standards included while the CDU/CSU
    stresses the need for protection of intellectual property and
    the FDP worries about domestic subsidies and market access.
    None of the parties wants to restructure the German economy
    to reduce export-dependency and address global imbalances.
    Other U.S. interests, such as concluding the Doha round of
    trade negotiations, would not likely be affected by a change
    in coalition.

    ¶25. (U) TAX POLICY (Some change): Tax policy is often cited
    as the area where a black-yellow government would produce
    change.  The FDP proposes a radical overhaul of the tax
    system to simplify the tax code and stagger the corporate
    rate.  CSU leader and Bavaria Minister-President Horst
    Seehofer has been critical of the FDP plan, which he says
    will run up the deficit and impose an excessive burden on the
    public budget.  Neither the CDU/CSU's nor FDP's tax proposals
    are realistic, however, in light of budget deficits that are
    expected to be more than 2 percent this year and 4 percent in
    2010, just as mid-term targets for Germany's balanced budget
    amendment kick in.  Some sort of tax increase therefore is a
    near certainty, perhaps in the form of an increase in the
    value-added tax.

    COMMENT
    -------

    ¶26. (C/NF) Chancellor Merkel will continue to exert strong
    influence on German foreign policy in an attempt to create a
    political legacy in international affairs.  This will be true
    whether the MFA is led by Steinmeier or Westerwelle.  We can
    also predict that tensions between the Chancellery and MFA
    will remain based on different coalition partners controlling
    them.  If Steinmeier returns to office, he will be a reliable
    partner.  Westerwelle is a wild card; his exuberant
    personality does not lend itself to taking a back seat to
    Chancellor Merkel on any issue.  If he becomes foreign
    minister, there is the possibility of higher profile discord
    between the Chancellery and MFA.  This may demand focused
    diplomatic engagement by the USG with the new FDP political
    actors.  END COMMENT.

    BERLIN 00001176  006 OF 006

    Murphy

`