BERLIN (Reuters) – Germany sees no alternative to the euro and Angela Merkel’s government believes the best way to strengthen the currency which has helped make the German economy so competitive is closer policy convergence across Europe.

But with German public support in the balance for rescuing euro partners Greece, Ireland and possibly others, it is a tough message for the domestic audience. This explains the apparently mixed messages emerging from Berlin.

Germany voices strong objections to some of the proposed solutions to the euro crisis, such as joint euro zone bonds, and Merkel’s insistence on a crisis mechanism from 2013 involving private investors has upset markets.

“But in the end Germany has a vital interest in the survival of the currency union,” Dekabank economist Andreas Scheuerle said.

While mass-selling daily Bild runs headlines like “How Long Will the Euro Hold Out?” and some pundits suggest a north-south euro divide, the crisis seems to have hardened the German establishment’s view that there is no alternative to the single currency.

The government, including the sometimes fractious members of Merkel’s centre-right coalition, plus the business world and the serious media are at pains to nix any talk of Germany losing its enthusiasm for the euro or returning to the deutschemark.

Economy Minister Rainer Bruederle, from the Free Democrats, Merkel’s often uneasy coalition partners, said on Thursday reinstating national currencies in the euro area was “not realistic”.

BERLIN (Reuters) – Germany sees no alternative to the euro and Angela Merkel’s government believes the best way to strengthen the currency which has helped make the German economy so competitive is closer policy convergence across Europe.

But with German public support in the balance for rescuing euro partners Greece, Ireland and possibly others, it is a tough message for the domestic audience. This explains the apparently mixed messages emerging from Berlin.

Germany voices strong objections to some of the proposed solutions to the euro crisis, such as joint euro zone bonds, and Merkel’s insistence on a crisis mechanism from 2013 involving private investors has upset markets.

“But in the end Germany has a vital interest in the survival of the currency union,” Dekabank economist Andreas Scheuerle said.

While mass-selling daily Bild runs headlines like “How Long Will the Euro Hold Out?” and some pundits suggest a north-south euro divide, the crisis seems to have hardened the German establishment’s view that there is no alternative to the single currency.

The government, including the sometimes fractious members of Merkel’s center-right coalition, plus the business world and the serious media are at pains to nix any talk of Germany losing its enthusiasm for the euro or returning to the deutschemark.

Economy Minister Rainer Bruederle, from the Free Democrats, Merkel’s often uneasy coalition partners, said on Thursday reinstating national currencies in the euro area was “not realistic.”

BERLIN (Reuters) – Angela Merkel did not make many friends in Europe in the run-up to the Irish bailout, but her severity and insistence on private investors sharing the risk were well pitched to address political concerns in Germany.

Finance Minister Wolfgang Schaeuble’s first reaction to the Irish deal was that it reassures taxpayers Europe has learnt the lessons of the financial crisis and “shows the European policy of the German government led by Angela Merkel is a clever one.”

Merkel roiled currency and bond markets ahead of the Irish rescue package by stressing the “exceptionally serious” plight of the euro and the need for investors to face losses in any future sovereign debt crisis in the euro zone.

Her message itself — including that dealers in government bonds should not be “the only business in the world economy that involves no risk” — does strike a chord with many in Europe.

But the tone and timing of the utterances by the leader of the biggest economy in Europe — which emerged from the global downturn in much better shape than its peers — has left many European policymakers asking whose interests she has at heart.

Eurogroup President Jean-Claude Juncker told one German paper this week he was worried that the German leadership was “slowly losing sight of the European public good.”

Editorials in papers across the region have wondered aloud whether Germany’s new-found assertiveness, belatedly matching its economic leadership with geopolitical clout, was positive or whether Germany would not become the “executioner” of the euro.

BERLIN, Nov 25 (Reuters) – The European Commission and German government denied on Thursday a news report that Brussels was considering doubling the size of a rescue fund to support the euro, with Berlin saying the fund was adequately financed.

An unsourced report in German daily Die Welt said that the European Union’s executive body had proposed doubling the size of the European Financial Stability Facility (EFSF).

“This is absolutely false,” said a European Commission spokesman.

Established after the bailout of Greece in May to defend the euro from further crises, the EFSF is designed to help a euro zone country by issuing bonds backed by up to 440 billion euros ($585.9 billion) worth of guarantees from euro zone governments.

“We think the question does not arise because only one country so far has applied for assistance from the EFSF and it is not an amount that makes us worry that there would not be capacity,” said a German finance ministry spokesman.

German Bundesbank chief Axel Weber, a powerful member of the European Central Bank’s governing council, said in Paris one day earlier the EFSF and other EU rescue funds had enough money, if needed, to cover the borrowing needs of stretched euro zone members Greece, Ireland, Portugal and Spain. [ID:nLDE6AN28M]

Together with separate EU and International Monetary Fund backing, the funds totalling 750 billion euros “should be more than enough to see off an attack on the euro zone”, he said.

BERLIN (Reuters) – German Chancellor Angela Merkel said on Wednesday European politicians needed the courage to make private investors share in the risk of future debt crises in the euro zone and show financial markets who is in charge.

“Have politicians got the courage to make those who earn money share in the risk as well? Or is dealing in government debt the only business in the world economy that involves no risk?” Merkel said in a speech to the German parliament.

“This is about the primacy of politics, this is about the limits of the markets,” said the chancellor, acknowledging that her insistence on this issue was making markets nervous.

The centre-right German leader is blamed by some in Europe for provoking the recent Irish debt sell-off by saying private euro-zone bondholders must be made to share the risk of future sovereign debt crises via a permanent euro crisis mechanism.

She sparked fresh selling of the euro on Tuesday by saying it was in an “exceptionally serious” situation.

This prompted one European Central Bank policymaker, Ewald Nowotny, to voice irritation at Merkel for not “differentiating between the euro as a currency and the problems of individual (eurozone) states.

The euro hit a two-month low against the dollar on Wednesday on renewed concerns about Ireland’s debt plans.

BERLIN, Nov 24 (Reuters) – German Chancellor Angela Merkel said on Wednesday European politicians needed the “courage” to make private investors share in the risk of future debt crises in the euro zone and show financial markets who is in charge.

“Have politicians got the courage to make those who earn money share in the risk as well? Or is dealing in government debt the only business in the world economy that involves no risk?” Merkel said in a speech to the German parliament.

“This is about the primacy of politics, this is about the limits of the markets,” said the chancellor, acknowledging that her insistence on this issue was making markets “nervous”.

The centre-right German leader is blamed by some in Europe for provoking the recent Irish debt sell-off by saying private euro-zone bondholders must be made to share the risk of future sovereign debt crises via a permanent euro crisis mechanism.

She sparked fresh selling of the euro on Tuesday by saying it was in an “exceptionally serious” situation. [ID:nBAT005787]

This prompted one European Central Bank policymaker, Ewald Nowotny, to voice irritation at Merkel for not “differentiating between the euro as a currency and the problems of individual (eurozone) states”. [ID:nVIE003584]

Merkel and Finance Minister Wolfgang Schaeuble have repeated in recent weeks that private investors must be involved in a new crisis mechanism for the euro zone to take effect from mid-2013, when the current mechanism lapses.

BERLIN/WINDHOEK, Nov 18 (Reuters) – Namibian police found a suspect package in Windhoek airport in routine security checks during the loading of a German tourist flight to Munich, Namibian and German authorities said on Thursday.

The Windhoek airport operators said the 296 passengers and 10 crew disembarked from an Air Berlin (AB1.DE: Quote, Profile, Research, Stock Buzz) plane and the luggage and cargo was unloaded for security checks after a suspicious parcel was discovered at the luggage screening point.

One German source said the package may have carried a label indicating it was a security test, though it was not clear who would have been responsible for carrying out this procedure.

Police in Namibia, a former German colony neighbouring South Africa with a population of around two million people, would not comment on this possibility.

“We can’t confirm or deny it was a test. We will communicate the outcomes of the investigation to the public as soon as it is finished,” said Namibian police inspector Jay Nangolo.

Police in Windhoek also declined to comment on information given by German federal police that the package contained a detonator, batteries and a running clock.

German Interior Minister Thomas de Maiziere, who warned one day earlier that the country faced a heightened risk of attacks by Islamic militants, said intelligence indicated “the luggage was to be transported onto a plane which was to fly to Munich”.

BERLIN (Reuters) – Germany has grown inured to criticism over its role in Europe’s woes and, seeing itself vindicated by events, is unlikely now to give up its insistence private investors accept risk in future euro zone crises.

When Finance Minister Wolfgang Schaeuble said on Wednesday Germany was not to blame for the euro zone’s problems and would stick to its proposal for a new crisis mechanism, he was not so much being defensive as saying what Germans find obvious.

Greece, Ireland and some European Commission and European Central Bank officials accuse Germany of causing a sell-off in peripheral euro zone bonds by insisting, with French support, that investors must in future share the sovereign default risk.

“Taken out of context there is obviously merit to the Franco-German proposal. But the timing could not have been more damaging,” wrote Simon Tilford, chief economist of the Center for European Reform in Brussels.

According to German logic, European Union leaders already accepted at their October summit Berlin’s proposal to replace the European Financial Stability Facility, which was set up in May and expires in mid-2013, with a new mechanism making private holders of euro zone debt accept some exposure to risk.

So when the same leaders like Greece’s George Papandreou say Germany could “break backs” and prompt bankruptcies by insisting investors face the risk of default, or a haircut, the German conclusion is that they are just playing to domestic audiences.

Merkel said on Thursday she was “completely convinced” this would happen. A day earlier, Sueddeutsche Zeitung wrote in an editorial “the chancellor should not sacrifice her principles.”

BERLIN (Reuters) – German conservative party headquarters is rocking. To the heavy thud of AC/DC, hundreds of young party members throng the foyer of Konrad Adenauer House in Berlin waving posters and talking over the music.

Music over, they listen with rapt attention and regular applause to Germany’s most popular politician — approval rating a record 74 percent — speak about passion and leadership. With Germany taking on a more assured and outspoken role in Europe, its economy moving into what the economy minister has called an “XL recovery”, and no national elections to worry about for three years, there’s every reason for Angela Merkel’s government to bask in the glow of success.

Unfortunately for the German chancellor, neither she nor her Christian Democratic Party (CDU) is the object of the chants and adulation at this rally of young conservatives on a Saturday afternoon in October. Instead, the calls — “KT! KT! KT!” — refer to Merkel’s debonair 38-year-old defense minister from the CDU’s smaller, more conservative Bavarian sister party, the Christian Social Union (CSU). “KT” is Karl-Theodor zu Guttenberg — or to give him his full dues, Karl Theodor Maria Nikolaus Johann Jacob Philipp Franz Joseph Sylvester, Baron von und zu Guttenberg. Pictures of Guttenberg and his wife Stephanie, the great-great-granddaughter of the “Iron Chancellor” Otto von Bismarck — architect of German unification in the 19th century — frequently decorate the covers of newspapers and magazines.

It may surprise many, especially those outside Germany, that the young noble is even considered a serious rival to the woman widely known as the new Iron Chancellor. But with the ruling coalition struggling in the polls, and some party insiders accusing her of weak leadership and a lack of enthusiasm, Merkel is beginning to look like a politician fighting for survival. In a Forsa survey in mid-October, 23 percent of respondents said Guttenberg would make a better chancellor than Merkel, with just 14 percent preferring the incumbent. More strikingly, nearly half the Germans polled saw no difference between the two leaders’ abilities — something of an insult to the 56-year-old chancellor, re-elected just a year ago and in the front line of German politics for almost two decades.

Guttenberg, who entered parliament just eight years ago, may turn out to be a flash in the pan. But his rise does highlight a contradiction about Angela Merkel: after five years as the most powerful person in Germany, her star seems to be waning at home even as it rises abroad. “There seem to be two Merkels — one abroad, one at home,” says Eberhard Sandschneider, research chief for the DGAP foreign policy think-tank. “It is a pattern in German politics and is similar to what her predecessors Helmut Schmidt and Helmut Kohl experienced.”

IRON CHANCELLOR OF EUROPE

In person, Merkel comes across as a supremely confident politician of growing global stature. Unemployment is at an 18-year low and Germany, unlike historic rivals France and Britain, has avoided the drastic austerity measures that have filled French streets with protesters and will chop almost half a million public-sector jobs in Britain. The economy, motoring along at 2.2 percent growth, looks likely to expand steadily from now until her second term ends in 2013. Germany’s growing assertiveness on the international stage has just been cemented by a new two-year turn on the United Nations Security Council.

BERLIN (Reuters) – German conservative party headquarters is rocking. To the heavy thud of AC/DC, hundreds of young party members throng the foyer of Konrad Adenauer House in Berlin waving posters and talking over the music.

Music over, they listen with rapt attention and regular applause to Germany’s most popular politician — approval rating a record 74 percent — speak about passion and leadership. With Germany taking on a more assured and outspoken role in Europe, its economy moving into what the economy minister has called an “XL recovery”, and no national elections to worry about for three years, there’s every reason for Angela Merkel’s government to bask in the glow of success.

Unfortunately for the German chancellor, neither she nor her Christian Democratic Party (CDU) is the object of the chants and adulation at this rally of young conservatives on a Saturday afternoon in October. Instead, the calls — “KT! KT! KT!” — refer to Merkel’s debonair 38-year-old defence minister from the CDU’s smaller, more conservative Bavarian sister party, the Christian Social Union (CSU). “KT” is Karl-Theodor zu Guttenberg — or to give him his full dues, Karl Theodor Maria Nikolaus Johann Jacob Philipp Franz Joseph Sylvester, Baron von und zu Guttenberg. Pictures of Guttenberg and his wife Stephanie, the great-great-granddaughter of the “Iron Chancellor” Otto von Bismarck — architect of German unification in the 19th century — frequently decorate the covers of newspapers and magazines.

It may surprise many, especially those outside Germany, that the young noble is even considered a serious rival to the woman widely known as the new Iron Chancellor. But with the ruling coalition struggling in the polls, and some party insiders accusing her of weak leadership and a lack of enthusiasm, Merkel is beginning to look like a politician fighting for survival. In a Forsa survey in mid-October, 23 percent of respondents said Guttenberg would make a better chancellor than Merkel, with just 14 percent preferring the incumbent. More strikingly, nearly half the Germans polled saw no difference between the two leaders’ abilities — something of an insult to the 56-year-old chancellor, re-elected just a year ago and in the front line of German politics for almost two decades.

Guttenberg, who entered parliament just eight years ago, may turn out to be a flash in the pan. But his rise does highlight a contradiction about Angela Merkel: after five years as the most powerful person in Germany, her star seems to be waning at home even as it rises abroad. “There seem to be two Merkels — one abroad, one at home,” says Eberhard Sandschneider, research chief for the DGAP foreign policy think-tank. “It is a pattern in German politics and is similar to what her predecessors Helmut Schmidt and Helmut Kohl experienced.”

IRON CHANCELLOR OF EUROPE

In person, Merkel comes across as a supremely confident politician of growing global stature. Unemployment is at an 18-year low and Germany, unlike historic rivals France and Britain, has avoided the drastic austerity measures that have filled French streets with protesters and will chop almost half a million public-sector jobs in Britain. The economy, motoring along at 2.2 percent growth, looks likely to expand steadily from now until her second term ends in 2013. Germany’s growing assertiveness on the international stage has just been cemented by a new two-year turn on the United Nations Security Council.