GERMANY'S GRAND COALITION IN GOOD CONDITION, FOR

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000747 SIPDIS SIPDIS E.O. 12958: DECL: 04/12/2022 TAGS: PGOV PREL GM SUBJECT: GERMANY'S GRAND COALITION IN GOOD CONDITION, FOR NOW Classified By: DCM: John Koenig Reason: 1.4(b) and (d) ¶1. (C) Summary. Germany's Grand Coalition of CDU/CSU and SPD is in good condition, despite tensions between the two parties on domestic and foreign policy. The CDU/CSU has for the most part taken the lead in domestic policy and Chancellor Merkel is broadly credited with doing a good job. The SPD's inability to take charge of the domestic agenda has led it to fish in foreign affairs in an effort to revive its public standing. Tensions between the two parties are much stronger at the grass-roots and parliamentary levels than they are within government, but there have been ministerial-level differences of view on policy. Looking ahead, the political climate will heat up noticeably in the run-up to state elections in Hesse and Lower Saxony in January 2008. The Coalition seems likely to survive until autumn 2009 - its full term. The growing strains in relations between the partners, however, will require more U.S. engagement to pursue our agenda successfully. End Summary. Background -------------- ¶2. (U) Since the establishment of the Grand Coalition in November 2005, the CDU/CSU has led popularity polls in all but two months (October-November 2006),when the SPD briefly surged as foreign policy issues (Lebanon and Afghanistan deployments) and bungled health care reform gave it a boost. For the last four months, the CDU/CSU has enjoyed a roughly five percent lead (35 to 30) over the SPD in polls aimed at gauging voters' intentions. State of the CDU/CSU -------------- ¶3. (C) Chancellor Merkel generally is in the lead or second place (after President Koehler) in popularity polls, with up to a 70 percent approval rating. Her leadership style -- letting ministers put forward new ideas and then taking a middle-of-the-road position in the subsequent debate -- and her prominence as leader of the EU and G-8, are important factors in her standing. Merkel and her party also both gain more than does the SPD from Germany's economic recovery. CDU/CSU internal unity has also solidified as her leading rivals have slipped (Stoiber),faded (Ruettgers),or begun to focus more on state matters (Koch in Hesse and Wulff in Lower Saxony). Nonetheless, the CDU/CSU remains very nervous about its position -- CDU national Business Manager Klaus Schueler recently described the party's goal as consistently scoring above 40 percent in polls and told DCM Koenig that the party was on thin ice, particularly in foreign policy, where it is not in step with the U.S.-critical mood of the German public. The Social Democrats Struggle -------------- ¶4. (C) The SPD is weak because: 1) As the junior partner, it does not get as much credit as the CDU/CSU for Germany's economic surge; 2) The CDU/CSU's multiple domestic policy initiatives child care Muslim integration, domestic security, energy) and its social modernization have wrong-footed the SPD; 3) SPD leader Kurt Beck has failed to establish a strong identity for himself or the party; and 4) The launch of the Left Party has undercut the SPD with organized labor and the left. Certainly, Beck gives the appearance of looking for issues to fuel a counter-offensive. In his year as SPD Chairman he has tried out numerous issues for their resonance -- supporting the middle class was an early effort; in recent months he has turned to foreign policy. While experts have questioned his criticism of U.S. missile defense plans and his suggestion for talks with "moderate" Taliban, such ideas are certainly in step with a public mood sour on foreign military engagement and predisposed to see U.S. actions as a threat to stability. Cabinet-Level Friction -------------- ¶5. (C) Throughout the first year of the Grand Coalition, the members of the cabinet worked together well, according to Embassy contacts. There was little public indication of friction within the cabinet even on the highly charged issue of health reform. This has changed somewhat in recent months and is, perhaps, an early indication that the tensions evident since 2005 at lower levels are beginning in the cabinet as electoral politics re-emerge. Over the Easter holiday, for example, CSU Economics Minister Glos clashed with SPD Environment Minister Gabriel and SPD Finance Minister Steinbrueck over nuclear energy and tax policy. Previously, Interior Minister Schaeuble (CDU) and Justice BERLIN 00000747 002 OF 002 Minister Zypries (SPD) clashed on proposed domestic security legislation. In addition to these public instances, Embassy has also reported on differences between the Chancellor and Foreign Minister Steinmeier (SPD) over Middle East policy. Toward 2009 -------------- ¶6. (C) Comment: The SPD's weakness is, paradoxically, both a cohesive force and a catalyst for internal conflict for the coalition. So long as it trails the CDU/CSU and lacks a highly charismatic figure to challenge Merkel, the SPD will be obliged to swallow its discontent and continue, as Vice-Chancellor Muentefering has long argued, to try and make the Grand Coalition a success for which the SPD ultimately can take credit. At the same time, both to quiet internal party discontent and to maintain an independent profile in the larger public, the SPD must seek to develop an agenda and image apart from the Coalition's as a whole. Nothing now on the horizon seems likely to change this dynamic. Implications for the U.S. -------------- ¶7. (C) We expect tensions between SPD and CDU/CSU to continue to rise slowly as the electoral agenda heats up. After the two January elections, Hamburg goes to the polls in the spring, and Bavaria in the autumn, of 2008. In July 2009, shortly before the expected federal elections, Thuringia will vote. While we would like to believe that Merkel and her team, freed from the constraints of the EU Presidency, will move more energetically after June to support our shared objectives, this impending election schedule will press in the opposite direction. Thus, with the SPD clearly willing to use foreign policy as a campaign issue to woo a receptive public, the U.S. will be obliged to devote more resources to the German relationship after the EU Presidency than before if we hope to enlist significantly more support from Berlin for our initiatives. Not only will we have to overcome potential SPD resistance, but we will also have to battle the view -- already seen in the CDU/CSU leadership -- that active support of the U.S. is a political liability. End Comment. TIMKEN JR