Merkel on defensive over Opel as election looms

1st September 2009, Comments 0 comments

So far in her campaign to win a second term, Merkel has been criticised for sitting on the fence on many issues, hoping that remaining aloof will keep her poll ratings high until voting day.

Berlin -- Angela Merkel's efforts to secure a rescue of General Motors' Opel unit and the jobs of its 25,000 German employees have put the chancellor on the defensive, just four weeks before general elections.

So far in her campaign to win a second term, Merkel has been criticised for sitting on the fence on many issues, hoping that remaining aloof will keep her poll ratings high until voting day.

But on Opel, Merkel has stuck her neck out, ramming home again and again that she wants GM to sell a majority stake in the unit to Canadian auto parts maker Magna and state-owned Russian lender Sberbank.

Berlin has put on the table a 4.5-billion-euro (6.5-billion-dollar) state financing package to assist Magna and Sberbank -- but has said no finance would be offered to the other bidder, Brussels-based investor RHJ International.

Unfortunately for Merkel, the board of GM, which has been majority owned by the US government since emerging from bankruptcy in July, does not appear to share her enthusiasm for Magna, saying it needs more details.

Several members of the board are thought to prefer RHJ, and some media reports have suggested the Detroit-based giant could even shelve its plans to offload Opel.

Merkel's stance has caused consternation in other European countries where Opel has factories -- for instance in Britain -- and Berlin's negotiating tactics have reportedly also ruffled feathers in Detroit.

Meanwhile, in Germany, she has come under fire from all sides.

"Germany's politicians made their choice far too quickly," said Fred Irwin, head of the German-US chamber of commerce and chairman of the trust that -- along with GM -- now controls Opel. "GM could very well choose neither bid."

Guido Westerwelle, head of the business-friendly Free Democrats, with whom Merkel wants to govern in place of her current centre-left coalition partners, said that Berlin "has taken Opel and Germany into a cul-de-sac."

"The federal government has made a big mistake," he charged.

Even members of Merkel's own CDU party have got in on the act, with Guenther Oettinger, premier of the state of Baden-Wuerttemberg, criticising the government's strong support for Magna.

"What matters is that any investor offers a viable future plan for Opel. Who the owner is of secondary importance. I trust Magna but I do not rule out that someone else is also capable," Oettinger told the Rheinische Post daily.

Even Economy Minister Karl-Theodor zu Guttenberg, from the CDU's Bavarian sister party the CSU and a surprise star in the current election campaign, conceded on Friday that there were "unanswered questions" about Magna's bid.

Manfred Guellner from polling institute Forsa said that voters had turned against helping Opel.

"On the one hand (voters) don't want Opel workers to lose their jobs, but on the other hand, they don't want the state just to help the big guys," Guellner told AFP.

"Now a majority of people think that it is not right to help out a firm in difficulty because of its own fault not because of the financial crisis," he said.

Others said Merkel's prospects for winning a second term are undiminished, however, because the SPD's candidate for chancellor, Foreign Minister Frank-Walter Steinmeier, has been just as in favour of Magna as Merkel.

"It is not just Merkel. At the end of the day, it was a commitment made by both the main parties (in the governing 'grand coalition')," Klaus-Peter Schoeppner from pollster Emnid told AFP.

"It is pretty astounding how stable Merkel's ratings are," Forsa's Guellner said. "Everything just bounces off her."


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