Merkel must get Germans to back sound EU integration

2nd January 2011, Comments 0 comments

The debt crisis has strengthened Germany's hand in Europe, but Chancellor Angela Merkel will have a tough time convincing voters that leadership might also mean digging deep for additional aid.

"So far, people do not see the costs that might be associated with what politicians have agreed to, namely some nation states underwriting the debt of others," Barclays Capital economist Thorsten Polleit told AFP.

"It is an open question whether the crisis is over or whether we are just in the eye of the storm."

As the de facto eurozone paymaster, Merkel has imposed strict aid conditions and insisted member countries coordinate economic policies to parry future crises.

But she must still persuade voters that Germany cannot turn its back on Europe even if it means contributing to a permanent rescue fund.

"A unified Europe is the guarantor of our peace and freedom. The euro forms the basis of our prosperity," she stressed Friday in her New Year's address.

"Germany needs Europe and our common currency, for our own well-being and also to overcome big challenges worldwide."

But the crisis' final cost is not known and perpetual change generated by the eurozone project has unsettled many Germans already, psychologist Monika Mueller said.

The founder of FCM Finance Coaching told AFP it was hard for people to feel what belonging to the eurozone meant "because they are confused."

"When things are constantly changing, it's difficult" to define a clear European identity, she said. "It's not easy to understand what is really happening."

Merkel was criticised by EU leaders for holding back as the crisis unfolded, but has since reaffirmed German solidarity with its partners.

"No one in Europe will be left alone", she told the national parliament last month.

A majority of Germans oppose more aid packages however, and with the threat of a court challenge and seven regional elections this year, politicians will "probably tread cautiously," Commerzbank economist Eckhart Tuchtfeld said.

Germany profits from trade within the eurozone, which now counts 17 nations with Estonia's admission, and was the main donor when weak finances in partner countries required a trillion-dollar rescue package.

Europe's biggest economy might have to pony up again if Portugal and Spain issue distress calls following those from Greece and Ireland last year.

Germany's economic strength also stems from prudent fiscal management, which includes a 2009 debt brake law aimed at slashing the public deficit by 2016.

For average Germans, sacrifices have included wage stagnation, deregulated labour markets and higher sales taxes, and many resent having to pay now for profligate policies elsewhere.

"This is problematic, there is no doubt about that," Tuchtfeld said.

Polls for public televisions ZDF and ARD have found 62 percent of Germans opposed more support for eurozone partners, but an overwhelming majority of 88 percent agreed that a stable eurozone was in Germany's interest.

An icon of German stability is the national pension plan introduced in 1889 by Otto von Bismarck, Mueller said.

That system is now crumbling however, in part because of the country's low birthrate.

"The stability and safety that we were promised is vanishing," Mueller said. "This makes us probably more sensitive to what happens with money and security and stability."

Polleit, who is alarmed by soaring eurozone debt levels, said: "To make the 'rescue measures' work, Merkel must make a convincing case for Germany's special role in and responsibility for the European integration process.

"That may not be an easy thing to do."

Mueller said Germans had ambivalent feelings about taking the lead, including fear stemming from the country's role in World War II.

"It would be helpful to let go of this fear and this concept of not being allowed to be one of the leaders in Europe," the psychologist suggested.

"We could take even more responsibility, in a good way," she said.

© 2011 AFP

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