Global News Journal

Waiting for Europe’s “appropriate response”

Will the euro zone finally act decisively?

Investors are hoping for something big from European leaders at the EU summit on Oct. 23 and of the Group of 20 on Nov. 3. But they also know the 17 nations of the euro have a habit of offering delayed, half-hearted rescues that have cost them credibility.

So there’s been a lot of “urging” and “warning” in Brussels lately — politicians and central bankers have all been demanding Europe act as international alarm grows that its sovereign debt problems may drag the world into recession. “Further delays are only aggravating the situation,” said European Central Bank President Jean-Claude Trichet on Tuesday in his last appearance at the European Parliament, before he hands over the post to Mario Draghi on Nov. 1.

A day earlier, Germany’s Deputy Finance Minister, Joerg Asmussen, at the parliament to promote his candidacy to join the ECB‘s board, made his call, saying “cooperation has to be increased,” across the euro members, divided as to who should pay to rescue the heavily indebted nations of southern Europe. “I want to see a solution for debt sustainability for Greece,” Asmussen said. So do so many others, especially Greek Prime Minister George Papandreou, who in Brussels on Thursday said it was a “crucial element to make the necessary decisions concerning Greece.”

The European Roundtable of Industrialists, a business lobby of multinationals ranging from French car maker Renault to Spain’s Telefonica, has also come through Brussels to make its point. The group’s head, Leif Johansson, who is also chairman of Swedish phone maker Ericsson, warned that if European leaders fail to act, businesses could see a repeat of the liquidity freeze that followed the collapse of U.S. investment bank Lehman Brothers.

“The worst element of the 2008/2009 crisis was when liquidity froze,” he said. “The worst scenario we have right now is that that could happen again … and there is a real downside risk.” 

The Oct. 23 summit is being billed as a make-or-break event where Germany and France, the main powers in the euro zone, must come up with the solutions investors want. A meeting last Sunday between German Chancellor Angela Merkel and French President Nicholas Sarkozy, and their promise of a comprehensive strategy, suggests there will be a serious attempt to put forward a framework to try to resolve the crisis.

Merkel fights back with drop-dead argument

Chancellor Angela Merkel and the leader of the opposition Social Democrats squared off in one of the more riveting debates in parliament seen in ages on Wednesday, treating their respective camps to some fiery rhetoric that may galvanize support and help each side recover from steady erosions in opinion polls. After SPD chairman Sigmar Gabriel threw down the gauntlet and spent 40 highly entertaining minutes ripping into Merkel and her centre-right government, the chancellor rose to the challenge — spending the next 40 minutes with a spirited defence of the performance since taking power 10 months ago and attacking the centre-left opposition for such things as putting Germany’s long-term energy security at risk with “ideologically driven energy policies.” Merkel, who may well face off against Gabriel in the next federal election due in 2013, whipped out a drop-dead argument that will probably make it difficult for anyone from either the SPD or from inside her own somewhat disenchanted conservative party to knock her out of office: unemployment has fallen by nearly two million to about three million since she took office in 2005.

Merkel’s popularity has nevertheless plunged since her re-election last year – due in part to incessant squabbling within the coalition and a perception her government has made little headway in moving the country forward. The centre-right government trails the centre-left opposition by about 10 points in opinion polls, an astonishing reversal of fortunes after they won the election last September by about 15 points.

“The most important thing is that the labour market is in robust shape,” Merkel, 56, said to cheers from her centre-right coalition of Christian Democrats and liberal Free Democrats sitting on the right half of the parliament floor who were clearly relishing their leader on the attack for a change. “Unemployment has fallen back to the level it was at before the financial crisis started two years ago. Five years ago it was nearly five million. This year we’ll possibly slip below the three million mark. That’s the mark of success for this Christian-Liberal coalition. We’re the growth engine of Europe.”

Gabriel, 52, had opened the debate in fine form, accusing Merkel of being a lapdog to lobbyists – her government gave hugely unpopular tax breaks to hotel owners and defied public opinion by agreeing to the demands of utilities to extend the use of nuclear energy. Gabriel also criticized what he called an increasingly unfair distribution of wealth in Germany under the centre-right government and the government’s habit of “giving tax breaks to the wrong people.”

He said the government has paid too much attention to saving private banks and not enough on education reform.

“The reason for your disastrous first year is that you don’t have a clue about which direction you’re taking the country in,” Gabriel said. “You’re primarily interested in catering to special interests. Never has a German government been so subservient to big business. You don’t have a clue about the damage your doing to Germany.”

Both political heavyweights scored points for good shots at each other but they also studiously ignored their own weaknesses. At the end of the day it was impossible to pick a winner – except perhaps the national TV audience and spectators in the Reichstag who got to see a really good battle for a change.

German banker bows out after stirring race, religion debate

A German central banker, Thilo Sarrazin, whose outspoken comments on race and religion sparked a fierce national debate unexpectedly quit the Bundesbank board on Thursday evening, sparing Chancellor Angela Merkel, President Christian Wulff and Bundesbank President Axel Weber a messy legal and political battle.

But Sarrazin, 65, made it clear that he will not go away and plans to use his new-found fame to press forward with the issues tackled in his best-selling book: that Muslims are undermining German society and threatening to change its character and culture with their higher birth rate. Whether Germans like his views or not, there is no denying that Sarrazin has struck a chord.

“It seemed to me to be too risky…to try to push forward against the entire political establishment and 70 percent of the media,” Sarrazin told hundreds of people at a book reading in Potsdam near Berlin. “That would have been arrogant and wouldn’t have worked. That’s why I’m making this strategic retreat now and will tackle the issues that are important to me.”

Despite widespread condemnation from political leaders, opinion polls showed there is widespread public support for at least some of Sarrazin’s observations in his bestselling book “Deutschland schafft sich ab” (“Germany does away with itself”).

Some of his book’s more explosive passages include:

* ”In every European country, due to their low participation in the labour market and high claim on state welfare benefits, Muslim migrants cost the state more than they generate in added economic value. In terms of culture and civilisation, their notions of society and values are a step backwards.”

* “I don’t want my grandchildren and great-grandchildren to live in a mostly Muslim country where Turkish and Arabic are widely spoken, women wear headscarves and the day’s rhythm is determined by the call of the muezzin.”

Sun setting on Merkel coalition?

As the sun started to set on the west side of the Reichstag on Wednesday evening — and perhaps on Chancellor Angela Merkel’s centre-right government as well — delegates to the Bundesversammlung (Federal Assembly) began switching to beer from the preferred beverage earlier in the day — coffee, water and apple juice.   There was an unmistakeable air of “Endzeitstimmung” (doomsday atmosphere) on the comfortable rooftop terrace of the historic German parliament building, where the catering is superb and the view of Berlin breathtaking.    The conservative delegates on the Reichstag roof were easy to spot — they were the ones with worried looks on their faces after a couple dozen unidentified “rats” from within their ranks twice failed in votes during the afternoon to give Merkel the votes she needed to get her candidate elected.

The conservatives were drinking their beer and trying to forget the day’s humiliation before going into battle for a third and final round later in the evening.

 ”It was a bit like Germany vs Serbia in the first two rounds,” said David McAllister, a leader in Merkel’s Christian Democrats in Lower Saxony, referring to a 1-0 World Cup loss earlier this month. “But the third round will be more like Germany vs England,” he added with a smile, referring to Germany’s 4-1 win over England on Sunday.   The opposition delegates were also easy to spot on the Reichstag rooftop terrace — they were the ones with smiles on their faces (and beer glasses in their hands) after seeing Merkel humiliated twice by her own coalition. Her candidate, Christian Wulff, fell short of the 623 votes he needed even though there are 644 delegates in the centre-right bloc.

Wulff got 600 in the first round and 615 in the second round. Even if he wins the third round later on Wednesday evening, Merkel has been badly damaged by the debacle.   The question on everyone’s mind is: How can someone lead one of the world’s most important countries if she can’t even keep her own coalition in line?   What is most unsettling for delegates in the centre-right bloc is that they don’t know who the defectors are. It has brought instant comparisons to the beginning of the end of the previous centre-left government of Social Democrats and Greens in 2005.

Early that year, the SPD and Greens were betrayed by someone from their own ranks on three votes in the state assembly of Schleswig-Holstein and state premier Heide Simonis was forced to resign. That humiliation sent tremors through then-Chancellor Gerhard Schroeder’s centre-left government and after a similar SPD-Greens government in North Rhine-Westphalia was voted out of power a few months later in May, Schroeder dramatically pulled the plug on his government. He called for snap elections — and ended up losing power to Merkel.   Will Wednesday’s debacle in the Reichstag mark the beginning of the end of Merkel’s reign?

Little help from celebs for Germany’s undecided voters

Nobel prize-winning writer Guenter Grass is dressed in a mustard-brown cord suit and reading his work to a reverent audience in a hushed Berlin night club.

It feels more like a book launch than a political campaign event just days before the German election. Yet as far as celebrity endorsements for German political parties go, this is as big as it gets.

The Social Democrats (SPD) have boasted Grass, author of “The Tin Drum”, among their most famous  and vocal supporters for 40 years. Party leaders have come and gone, but 81-year-old Grass is reassuringly familiar — and strangely ageless as he reads in an expressive, animated voice.

The mood is convivial. Hardly what is required to provide the much-needed shot in the arm for the SPD, who lag Chancellor Angel Merkel’s Christian Democrats in the polls.

Political endorsements by Germany’s stars of stage and screen have always been earnest and low-key, in sharp contrast to the glamour Hollywood celebrities or chart-topping musicians hope to inject in U.S. elections.

But this time around, in an election campaign lacking dynamism and momentum from all sides, even the endorsements sound particularly flat, as the testaments on campaign websites for the two leading candidates show.

“When I see him and hear him speak, I see a man who is very clear,” explains Katharina Saalfrank, a television presenter famous for reforming naughty children in the show “Super Nanny”, on a website supporting Frank-Walter Steinmeier, the SPD Chancellor candidate.

Flashmobs target Merkel at final election rallies

Getting pelted by eggs or tomatoes is an occupational hazard for most hardened politicians on the election trail.******But German Chancellor Angela Merkel, seeking re-election on Sunday, has been confronted with a new kind of protest during her final campaign rallies: flashmobs.******The mobs, groups of people summoned over the Internet to show up at a specific time and place to do something unusual, have materialised at several election events in the last week to wave flags and banners and heckle the unsuspecting Merkel.******Mostly, they have been chanting “Yeahhhh!” after every sentence she utters and the slogan is meant as an ironic expression of support.******It may not sound like the most damaging critique, but Merkel has cottoned on to the flashmobs and now even addresses them at the rallies as “My young friends from the Internet”.******So is this a new form of political protest or just a bit of fun?******Blogger Rene Walter, who writes for nerdcore, says there is a serious idea behind the light-hearted gatherings.******”We are not just going to swallow the election messages, we are spitting back the rubbish Merkel speaks in the ironic form of a “Yeahhh!”, he says in the Sueddeutsche Zeitung daily.******Many involved in the flashmobs support the Pirate Party, who are popular among young voters and oppose what they say is censorship of the Internet that has been brought in under Merkel’s government.******One thing is for sure. Flashmobs are injecting some much-needed spontaneity into the final days of a campaign which many voters think has been the most turgid in decades.******But are flashmobs here to stay? Could they become the political protest movement of the Internet age?

What the election campaign says about Germans

Strikingly different election campaign styles in Germany and Britain, especially parties’ contrasting use of the media, provide some intriguing insights into the political traditions of the two nations.

in Britain, the parties hold daily news conferences, broadcast live, where leaders attempt to set an agenda for the day — be it on health, tax or education — and then get grilled by the press corps.

In Germany there is no equivalent. In fact, there are not even regular weekly news conferences with conservative Chancellor Angela Merkel and her Social Democrat (SPD) rival Frank-Walter Steinmeier. 

Instead, they seek direct contact with voters by holding speeches in town squares and, especially in the southern state of Bavaria, beer tents.

The challengers are not interested in playing to the media because the election does not dominate the German headlines as much as it does in Britain.

One reason for the particularly strong contrast this year is the duo fighting the German election. Merkel and Steinmeier are shying away from personal attacks as they know they may have to share power again after the Sept. 27 vote.

And few dispute that either challenger competes with former British Prime Minister Tony Blair or opposition leader David Cameron – let alone U.S. President Barack Obama — on charisma.

‘Dinnergate’ perks up German campaign

The German election campaign has so far lacked the riveting debates and explosive issues to which voters were treated in previous battles for power, perhaps because Chancellor Angela Merkel and her rival, Vice-Chancellor Frank-Walter Steinmeier, have worked together in the same “grand coalition” government for the past four years and neither party seems especially eager to rock the boat.

Filling the void have been several somewhat bizarre little scandals that each side has tried to use to tarnish the other, taking pot shots without resorting to full firepower. They are, after all, partners in power.

First there was Ulla Schmidt, the Social Democratic health minister whose questionable use of her official car on holiday in Spain came to light only after the car was stolen. Merkel’s Christian Democrats and opposition parties have done all they can to turn the “Dienstwagenaffaere” into a campaign issue — an example of a minister out of touch with voters for taking full advantage of government privileges — even though Schmidt insists she has done nothing wrong.

Now Merkel, the CDU chancellor, is facing criticism from the SPD and opposition parties for throwing a controversial dinner party at the chancellery (at the taxpayers’ expense) last year for Deutsche Bank CEO Josef Ackermann to mark his 60th birthday. “She told me at the time she would like to do something for me,” Ackermann told German TV in a profile of Merkel last week. “She said I should invite 30 or friends I’d like to spend an evening with to the chancellery.”

Merkel defended the meeting, saying she is always trying to bring different groups of people together at dinners.

And also in the spotlight is Economy Minister Karl Theodor zu Guttenberg, the rising young star of the Bavarian Christian Social Union, for using external advisers to draft complex financial legislation.

A parliamentary budget committee has started an investigation into whether any government rules were violated. Germany’s best-selling daily Bild has already reached its verdict: “It’s all nonsense,” wrote Einar Koch in a column on Wednesday. “The petty dispute about the dinner in the chancellery shows how devoid of content the 2009 election really is. If the chancellor of Europe’s leading economic power cannot invite 25 important industry and cultural leaders to a dinner in the chancellery, then it’s ‘good night’ for Germany”. His paper’s editor-in-chief Kai Diekmann and its publisher Mathias Doepfner were among those at the Ackermann party. So is it misuse of taxpayer money for the chancellor to throw a birthday party at her office for one of the most powerful bankers in the country? Or is it simply a smart thing to do, getting industry, political and cultural leaders together for some high-powered elbow rubbing?

Merkel softens up and talks baking, makeup and clothes

Between running an election campaign and trying to save European carmaker Opel at the weekend, German Chancellor Angela Merkel was baking a currant cake and writing out a shopping list for her husband.

Merkel has sought in recent months to soften her business-like image by opening up about her life at home, hoping to reach out to more voters ahead of the federal election on September 27.

As Germany’s first woman chancellor, Merkel used an interview with feminist magazine Emma this week to illustrate her down-to-earth approach to juggling work and family.

According to the Allensbach Institute, a leading pollster, Merkel did not score better with women than she did with men in the last federal election in 2005.

But her gender may be playing a role this year — some 41 percent of women plan to vote for her conservatives next month compared to 34 percent of men.

Merkel, ranked by Forbes as the world’s most powerful woman for a fourth straight year, said she really enjoyed cooking and did so whenever she got the chance, sharing other domestic chores with her husband when their housekeeper was on holiday.

“My husband doesn’t cook, mostly he shops and on Friday I write him a list so he can do the shopping for the weekend,” she said.

Nuclear heats up German election campaign

A technical fault at a German nuclear power station has thrown a spotlight on one of the few issues that divide the two main parties before September’s election — atomic energy.

But the anti-nuclear Social Democrats (SPD), who have shared power with Chancellor Angela Merkel’s conservatives since 2005, may be disappointed if they had hoped to win votes from it.

Merkel, forced to accept a phaseout of Germany’s atomic plants under its coalition deal with the SPD, is campaigning on extending the lifespan of nuclear plants which are deemed safe.

By contrast, the SPD is committed to the phaseout which it introduced in a previous alliance with the Greens, and Saturday’s failed restart at the ageing Kruemmel plant in northern Germany has galvanised some of its members into action.

The SPD, trailing Merkel’s conservative camp by more than 16 percentage points and at risk of losing its role in government, is trying to do all it can to mobilise its traditional supporters before the Sept. 27 vote.

SPD Environment Minister Sigmar Gabriel pounced on the incident, swiftly taking to the airwaves to push his case that the phaseout should be accelerated. And on Wednesday a Berlin newspaper was strategically leaked a government statement, albeit from 2006-07, which said safety standards at older plants like Kruemmel were not as high as at more modern reactors.

Germans have for decades nurtured an aversion to atomic energy, which supplies just under 30 percent of their power needs.