MERKEL FACES PARTY CONVENTION AFTER YEAR IN OFFICE

C O N F I D E N T I A L BERLIN 003333

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/17/2016
TAGS: PGOV PREL GM
SUBJECT: MERKEL FACES PARTY CONVENTION AFTER YEAR IN OFFICE

REF: BERLIN 2769

Classified By: Deputy Chief of Mission John M. Koenig.
Reasons: 1.4 (b) and (d)


1. (C) After a year in office, Chancellor Merkel finds
herself, her party, and her government languishing in the
polls. The largest tax hike in German history, a failed
health care reform effort, and challenges to Merkel's
Qdership from within her own party are the three leading
causes of this slump. Foreign policy issues like military
deployments and European and transatlantic relations are
marginal factors at most. Leading CDU figures like party
Business Manager Johannes von Thadden and MdBs Ursula Heinen
and Philipp Missfelder have told us there is deep
dissatisfaction within the party rank-and-file with both
Merkel and the government. The upcoming National Convention
of the CDU, in Dresden Nov. 27-28, holds many dangers for the
Chancellor and, if it weakens her, for the strength and
stability of the governing coalition as well.


2. (C) Merkel, however, also brings real strengths to the
convention including a growing economy, a shrinking
unemployment rate, and key policy successes with federalism
reform, corporate tax reform, and movement on immigrant
integration. After just one year in office, these provide a
respectable platform for her campaign for re-election as
party leader. In addition, the CDU faces no major electoral
contests until the spring of 2008, so Merkel's perceived
weakness as a campaigner will not yet be a major focus. At
the tactical level, convention delegates will be loathe to
weaken a CDU Chancellor and, as Missfelder (a critic of
Merkel's leadership) put it, the CDU has always been at heart
a "Chancellor's party." For these reasons, all our
interlocutors expect Merkel to be easily re-elected.


3. (C) Analysts, however, will focus on her margin of victory
as compared to that of rivals (who generally also hold party
offices) and to her own 88 percent margin in 2004. At the
top of the list of potential rivals to watch is Lower Saxony
Minister-President Wulff, who has kept a low-profile in the
recent months of inner-party strife. Party sources tell us
that North Rhine-Westphalia (NRW) Minister-President Juergen
Ruettgers is likely to do poorly because of his role in
damaging the party's public standing. However, several
contacts have also predicted that CDU General Secretary
Pofalla, a Merkel protege, will be made the scapegoat for
party dissatisfaction with Merkel.


4. (C) Comment: The impact of the convention on Merkel and
the government is difficult to predict because it depends
heavily on how the mainstream interprets her re-election and
whether she succeeds in containing inner-party tensions. One
insider told us he believes that, while Merkel will probably
do well in the numbers, she will not be able to mend the
split between the Christian-social and market-liberal wings
of the party. If he is correct, the CDU can look forward to
more negative headlines in the not too distant future. End
Comment.

TIMKEN JR