Germany’s merkel says heavy election defeat won’t affect europeanpolicy – Gm Tech2 Scanner

BERLIN – German Chancellor Angela Merkel insisted Monday that a heavy stateelection defeat for her party won’t weaken her as she grapples withEurope’s deepening debt crisis. Facing an emboldened opposition at home as a national vote loomsnext year, Merkel made clear that she was sticking to her emphasison budget discipline. However, she said “no one on our side hasanything against growth.” Merkel, who this week must start building a relationship withFrance’s new Socialist president, saw her Christian DemocraticUnion suffer its worst election result Sunday in NorthRhine-Westphalia — Germany’s most populous state —since World War II. Voters strengthened a regional government runby Germany’s main opposition parties that her conservativesportrayed as irresponsibly spendthrift.

Merkel conceded that it was “a bitter, painful defeat” but was atpains to downplay it as largely a regional event. Voters, she toldreporters, saw that “I was not up for election there.” But while a popular center-left governor and a poor campaign by theconservative challenger played a part, it was the latest in astring of poor state election showings over the past two years forMerkel’s infighting-prone center-right national coalition with thepro-market Free Democratic Party. “Angela Merkel and the CDU and FDP no longer have a prospect of amajority,” said Sigmar Gabriel, the leader of the center-leftSocial Democrats, Germany’s biggest opposition party. All the same, national polls currently show Merkel’s conservativesas the biggest party, and her coalition about level with the SocialDemocrats and their allies, the Greens — with neither side inline for a parliamentary majority.

They also show support forMerkel’s stance in the debt crisis. Merkel pointed to those polls, and increasing numbers of undecidedvoters. “I am very relaxed about the federal election,” she said.The elections are expected to take place in September 2013. Merkel said her work in Europe was “not affected” by Sunday’soutcome. Perkins EST

Still, the main German opposition parties, which have voted infavor of Merkel-backed rescue plans so far but want a greateremphasis on growth, will now be tempted to assert themselves on theissue. Merkel needs their support to get the European budget-disciplinepact through the German Parliament, where it requires a two-thirdsmajority. They haven’t yet spelled out their price. “What we must do now is talk about the fact that we need the fiscalcompact and must complement it with growth impulses,” Green leaderCem Ozdemir said. Gm Tech2 Scanner

“But I want to say very clearly, this is notabout traditional left-wing debt-based growth incentives but aboutincome-based growth incentives.” That income could be generated by a tax on financial transactions,he said — a long-standing demand that is divisive forMerkel’s coalition. Merkel said she will speak with the opposition. “There is no contradiction between solid budget policies andgrowth, and that will guide us in the discussions over the comingweeks,” she said. Merkel also faces demands to do more for growth from incomingFrench President Francois Hollande, who visits Berlin on Tuesday.He talked before ousting Merkel ally Nicolas Sarkozy ofrenegotiating the fiscal compact, though it’s unclear whether hewill push for a full renegotiation or settle for separate talks ongrowth. “No one on our side has anything against growth, but the questionis what that means for budget policy,” Merkel said. China Automotive Key Programmer

“I would liketo recall again that the Greek crisis was not caused by too muchsaving.” As for her domestic political troubles, Merkel signaled that hercoalition needs to overcome squabbles over issues ranging frombenefits for stay-at-home parents to data protection. “The task now is to deliver sensible government work, and resolveand agree on issues that are on the agenda,” she said.

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