She's Baacckk!! - Merkel's Five Biggest Problems

From Spiegel:

Back From VacationMerkel's Five Biggest Problems

By Björn Hengst

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Merkel heads back to the Chancellery on Monday morning.

Angela Merkel may have enjoyed a relaxing summer vacation, but that's all over now. With her first day back at work this Monday, the German chancellor begins a busy autumn. And the list of problems she faces is long.

At first glance, German Chancellor Angela Merkel's schedule for the first few days back from summer vacation appears to be rather leisurely. On Wednesday the cabinet meets, then the chancellor heads to Canada for two days to discuss relations between the two countries with Prime Minister Stephen Harper. Over the weekend, citizens will visit the Chancellery for a special open house. "I'm looking forward to meeting you," Merkel wrote in a welcoming statement for the occasion.

But the situation isn't as relaxed as it may appear. There is much to suggest that the conservative politician will face the deciding months of her chancellorship when she returns. Though the next federal election isn't until autumn of 2013, Merkel must now begin campaigning for her Christian Democrats (CDU), in addition to juggling a number of other problems:

First: Issues surrounding the euro are becoming increasingly uncomfortable forMerkel. While the chancellor was hiking in Italy's South Tyrol region, skeptics from her own government coalition criticized Greece, the European Union's highly indebted problem case. A Greek exit from the euro has "long since lost its horrors," said Economy Minister Philipp Rösler, leader of Merkel's junior coalition party, the pro-business Free Democratic Party (FDP). Then Markus Söder, a member of the CDU's Bavarian sister party, the Christian Social Union (CSU), and finance minister for the state, said that "an example must be made of Greece." Any further aid to the country would be "like pouring water into the desert," he added. Considering just how high the stakes are when it comes to the euro's survival, this is exactly the kind of unrest that Merkel can do without.

She's also waiting for the Federal Constitutional Court to hand down its decision on Sept. 12 as to whether the permanent euro rescue fund, the European Stability Mechanism (ESM), is compatible with German law. While an unfavorable decision from the court in Karlsruhe would spark unpredictable consequences, approval still wouldn't ensure the survival of the euro.

Second: On the domestic policy front, Merkel will have to deal with her sluggish transition to renewable energy, ongoing conflict over childcare subsidies, and now a row over whether gay and lesbian couples should have the right to equal tax benefits. Junior coalition partners the FDP have spoken out in favor of extending joint-filing benefits to those in a civil union, but conservative Finance Minister Wolfgang Schäuble has said he doesn't think it's necessary. Adding fuel to the fire, conservative Defense Minister Thomas de Maizière has criticized his 13 fellow party members who signed a paper stating their support for the equal benefits. The government coalition is damaged when individual parliamentarians start initiatives unilaterally, he told daily Der Tagesspiegel on Sunday. "The opposition will just laugh into their sleeves," he added.

Third: The FDP's weak electoral support could force Merkel to do without it altogether in a future coalition. The business-friendly party's popularity has dropped to 4 percent, according to a poll conducted by opinion research center Emnid for the Bild am Sonntag paper. The party will have to improve its standing to even clear the 5 percent hurdle necessary to make it into parliament at all. But the atmosphere among FDP members has reportedly become poisoned by power struggles. SPIEGEL has learned that if the party doesn't significantly improve upon its expected results in the Lower Saxony state election this January, high-level Free Democrats plan to topple party leader Philipp Rösler.

Fourth: Populist rumblings from Merkel's other coalition partner, Bavaria's conservative CSU, are also making things uncomfortable for the chancellor. Bavarian governor and CSU leader Horst Seehofer is already worried about results in the state election next year, which has prompted a populist tone from party members directed mainly against further aid for Greece. "At some point, everyone has to move away from mommy," state Finance Minster Söder said last week. "For Greece, that time has come."

In early July, Seehofer even threatened to break up the coalition over Merkel's euro crisis policies. But members of her own CDU are also rumored to be skeptical of the chancellor's euro rescue tactics. Some are also said to be unhappy that the party paved the way for a nuclear energy phase-out and the end of compulsory military service. Ultra-conservative members reportedly fear for the party's values and plan to present a conservative manifesto soon.

Fifth: While Merkel was able to rely on the opposition center-left Social Democrats and the environmentalist Greens for her past euro rescue efforts, they may not offer their support for much longer. Both parties voted in favor of aid money for Greece and Spain. Indeed, it was the only way Merkel could be sure of a majority vote given the presence of party rebels in her own coalition. But Merkel can no longer rely on the SPD without making some concessions, parliamentarian and former Finance Minister Peer Steinbrück told daily Süddeutsche Zeitung. A majority vote in favor of a third bailout for Greece would be unlikely "without a structural way out of the crisis for the country in view," he said. Steinbrück also expressed support for SPD party chair Sigmar Gabriel's idea for European debt collectivization -- an approach Merkel has rejected.

The chancellor's vacation is over. The campaign has begun.