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 
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¶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