CSU UNITES BY STRESSING BAVARIAN DIFFERENCES WITH BERLIN

UNCLAS SECTION 01 OF 02 MUNICH 000141

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TAGS: PGOV PREL GM
SUBJECT: CSU UNITES BY STRESSING BAVARIAN DIFFERENCES WITH BERLIN

SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION.

REF: (A) Munich 102; (B) Munich 130

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SUMMARY
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1. (SBU) The Bavarian sister party to Chancellor Merkel's Christian
Democrats (CDU),the Christian Social Union (CSU),held a special
closed-door meeting for its leadership to address voter discontent
and the appearance of divisions among the party leadership. The
CSU's leaders emerged from the meeting showing a united front, but
promoting plans to highlight differences with Merkel's Grand
Coalition government where Bavarian interests appear threatened.
The strategy is aimed at ensuring that the CSU maintains its
long-held absolute majority in the fall state elections, and that
CSU party chief Erwin Huber keeps his job. CSU politicians believe
that it is in the interests of the CDU for the CSU to bolster its
standing in Bavaria, even if it requires criticizing the national
Grand Coalition to do so. End summary.

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THE SPRING OF THE CSU'S DISCONTENT
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2. (SBU) The leadership of the CSU held a closed-door meeting at
the Bavarian alpine resort of Wildbad Kreuth April 4-5 to address a
perceived "crisis of confidence" on the part of CSU voters resulting
from a stream of negative news that has plagued the party in recent
months. The party's woes came into clear relief following the CSU's
worst municipal election performance in forty years on March 2 (Ref
A),leading to media speculation of a rift between Bavarian
Minister-President Guenther Beckstein and CSU Chairman Erwin Huber,
and a simmering "revolt" among the party's rank-and-file. Some had
even speculated that Federal Agriculture Minister Horst Seehofer
would be brought home from Berlin to replace Huber as party chief.


3. (SBU) The March 2 municipal elections exposed a general voter
discontentment with the status quo, rather than any single "hot
button" issue. Among the issues contributing to voters' sense of
malaise: Bavaria's tough smoking ban that went into effect at the
beginning of the year, but was subsequently watered-down to placate
smokers; Bavarian officials handling of state bank BayernLB's 4.3
billion euros in subprime-related losses (with Huber, as Finance
Minister, sitting on the bank's supervisory board and a state
legislature committee set to investigate -- see Ref B); the collapse
of the planned, but unpopular "Transrapid" maglev train project
between the Munich airport and main train station due to spiraling
costs (Huber's pet project); and frustration over state educational
reforms. Additionally, Bavarian voters have expressed frustration
with certain federal policies undertaken by the Grand Coalition in
Berlin, including health care reform and increased taxes.


4. (SBU) Some public opinion polls have recently predicted the CSU
may get only about 50 percent of the vote in the September 28 state
elections, in contrast to the party's 2003 result of 60 percent,
which gave the party a two-thirds majority in the state legislature
(Landtag) [Note: the two-thirds majority is due to the CSU receiving
a portion of the votes from smaller parties that did not meet the
threshold to enter the Landtag. End note]. Meanwhile, both the
"Independent" party and the Free Democratic Party (FDP) have
legitimate hopes of winning enough votes to meet the five percent
threshold necessary to enter the Landtag this fall, and would
primarily gain seats from the CSU -- leaving many of the CSU's 124
Landtag deputies, particularly those without constituencies, feeling
vulnerable.

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HIGHLIGHTING DIFFERENCES WITH BERLIN
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5. (SBU) Despite speculation over internal party divisions, the
CSU's leadership emerged from its Wildbad Kreuth session displaying
a united front, and vowing to go on the offensive in the face of the
fall elections. While sidestepping the party's problems at the
state-level, CSU Chief Huber announced a strategy aimed at
demonstrating that the CSU puts Bavaria first by sharpening the
party's profile on federal issues. Huber promised to submit a
reform paper aiming at lower taxes and a reintroduction of a tax
deduction for commuters. CSU leaders also are pushing for an
amendment of the federal health care reform agreed to by the Grand
Coalition, should the reform result in Bavaria having to pay more
than 100 million euros per year into the federal healthcare system.


6. (SBU) CSU Deputy Political Director and Foreign Policy Advisor
Oliver Weiler told ConGen Munich that while he understands how the
outcome of the Kreuth meeting could possibly be interpreted as
undercutting the Chancellor's agenda, it is ultimately in the

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Chancellor's, and CSU sister party CDU's interest to have a strong
CSU representing the CDU/CSU's southern tier. For the CSU to remain
a strong coalition partner, said Weiler, "it must represent
Bavaria's interests."

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COMMENT
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7. (SBU) The outcome of the Wildbad Kreuth meeting is consistent
with what we have come to expect from the CSU: at the end of the
day, putting aside divisions (at least publicly),and demonstrating
party loyalty and discipline with a goal of the CSU winning at least
50 percent of the vote in the next election. Huber's strategy of
highlighting differences with the Grand Coalition should come as no
surprise. His mandate as CSU Chairman is to ensure that the CSU
holds on to its absolute majority in Bavaria -- something the party
has done for nearly half a century. If that means distancing the
party from earlier grand coalition agreements, so be it -- the CSU
would not be taken to task by its voters for abandoning Berlin or
the Grand Coalition, but it surely would for being seen as
abandoning Bavaria. End comment.


8. (U) This report has been coordinated with Embassy Berlin.


9. (U) Previous reporting from Munich is available on our SIPRNET
website at www.state.sgov.gov/p/eur/munich/ .

NELSON