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C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 001294 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 07/02/2017 
TAGS: GM PGOV PREL
SUBJECT: MERKEL AFTER THE SUMMITS: THE WIND AT HER BACK 
 
REF: A. BERLIN 1284 
     ¶B. BERLIN 1253 
     ¶C. BERLIN 1251 
     ¶D. BERLIN 1093 
 
Classified By: Deputy Chief of Mission John M. Koenig for reasons 1.4 ( 
b) and (d). 
 
¶1.  (C) Summary:  After the successful conclusion of two 
high-profile summit meetings in June, Angela Merkel is at a 
high point of her Chancellorship.  Her public support is 
rising after having negotiated a climate change 
"breakthrough" at the G-8 Summit and an agreement at the EU 
Summit to advance the Union's structural reform (Ref A). 
While she and the CDU are buoyed by encouraging poll numbers, 
the SPD and its leader, Kurt Beck, continue to falter, having 
failed to find an issue around which to rally and excite the 
German public.  The end of the EU presidency marks the start 
of a new phase in the Grand Coalition, with elections (on the 
state level in 2008, at the federal level in 2009) on the 
visible horizon.  Tensions in the coalition continue to 
increase.  While leaders in both parties remain committed to 
the Grand Coalition through its 2009 term, they also are 
emphasizing their dissatisfaction with it, underscoring that 
they would prefer not to continue the coalition after the 
next election.  An early dissolution still is judged very 
unlikely -- neither major party could be assured of a 
majority coalition with one of the smaller parties.  After 
her foreign policy success at the G-8 and EU summits, Merkel 
faces challenges in domestic policy, where the SPD will seek 
to take the initiative in setting the agenda and use policy 
stalemates as future campaign issues.  End summary. 
 
CDU Spin: Merkel Responsible for Summit Successes 
--------------------------------------------- ----- 
 
¶2.  (SBU) Having for the most part dampened expectations 
prior to both summits, Merkel and the CDU are now able to 
claim the summits as major successes, primarily because of 
progress with the U.S. on energy and climate change and 
Merkel's role in helping to avert a crisis over EU 
institutional reform.  Her supporters attribute these 
victories to Merkel's command of detail, charm, 
persuasiveness, and persistence.  She is seen as having 
navigated a rocky road, establishing herself as a key world 
leader -- one able to negotiate hard-to-achieve settlements. 
At the same time, she is seen by sympathizers as protecting 
German interests.  She remarked, for example, after the G-8 
Summit that, "we get along well with the United States. 
However, we do not check off everything the U.S. wants." 
Indeed, it appears that Merkel's leadership style is, in 
fact, in tune with the spirit of the times in Germany -- 
taking a cautious view about what Germany should do outside 
Europe, focused on economic and environmental issues, and 
committed to diplomatic consensus-building. 
 
SPD Spin: Merkel and CDU Out of Touch with Germans 
--------------------------------------------- ----- 
 
¶3.  (SBU) The SPD -- challenged from the right by the CDU/CSU 
and from the left by the new Left Party (Ref B) -- publicly 
viewed the G-8 Summit outcome much more critically.  Within 
hours of the Summit's conclusion, SPD Chairman Kurt Beck 
accused the CDU/CSU of being "neo-liberal" and out of touch 
with the concerns of everyday Germans, adding that 
neo-liberalism runs contrary to the principles of the social 
market economy for which Germany stands.  Beck was, as has 
been his style, attempting again to find an issue with public 
resonance at a time when Merkel appears to be solidifying her 
leadership position.  The CDU dismissed Beck's criticism as 
evidence the SPD is simply "getting nervous."  The SPD pitch 
fell flat and, after the EU Summit, Beck was more 
circumspect, saying simply that Merkel deserved respect and 
recognition for her success at the EU Summit. 
 
¶4.  (C) Beck continues efforts to strike a chord with the 
German public (Ref D), but he has been unsuccessful thus far 
and his personal popularity has fallen further.  Only about 
one-third of SPD voters now approve of his performance as SPD 
party leader, according to a Rheinpfalz/ARD poll.  Some of 
the disenchantment is likely due to backfired attempts to 
search for a winning issue.  His attempt last year to appeal 
to the middle class -- by criticizing the long-term 
unemployed -- was soon thereafter mitigated by a need to 
cover the left flank after criticism by the Left Party.  Beck 
got some traction earlier in 2007 with his categorical 
rejection of U.S. missile defense plans in Europe, but his 
more recent forays into foreign policy -- such as suggesting 
negotiations with "moderate" Taliban -- led some to deride 
him as an "amateur foreign minister."  (The relative 
 
BERLIN 00001294  002 OF 002 
 
 
popularity of Germany's real Foreign Minister, Frank-Walter 
Steinmeier of the SPD, further limits Beck's opportunities to 
distance the party from the Coalition on foreign policy 
issues.) 
 
German Public Strongly Supports Merkel 
-------------------------------------- 
 
¶5.  (SBU) Various polls reflect the benefits to Merkel of 
global diplomacy.  The CDU/CSU has gained up to two 
percentage points (up to about 38 percent) in recent weeks, 
extending its lead over the SPD to a range of 8 to 12 
percentage points.  Merkel's popularity remains strong, 
according to the Forsa poll -- 54 percent of all Germans 
would vote for her as chancellor if direct elections were 
possible.  In contrast, only 17 percent of all Germans would 
vote for Beck.  (Note:  because the Chancellor is not 
directly elected by the voters, the 54 percent figure is only 
illustrative of Merkel's popularity but not indicative of the 
likely outcome of a national election for the CDU/CSU.  End 
note)  These figures indicate significant crossover potential 
for Merkel.  Indeed, among SPD voters, 40 percent say they 
would vote for Merkel, while only 29 percent would vote for 
Beck. 
 
Growing Tensions in the Grand Coalition 
--------------------------------------- 
 
¶6.  (SBU) Halfway through the legislative period, and with 
state-level elections approaching in six months, a new phase 
has begun, with many in both governing parties looking toward 
a post-Grand Coalition government.  Volker Kauder, Chairman 
of the CDU parliamentary caucus, spoke out against the 
renewal of the Grand Coalition after its scheduled end in 
2009, endorsing a future partnership with the FDP (Ref C). 
"In the interest of democracy, grand coalitions should only 
be an exception to the rule," remarked Kauder, adding, 
however, that an early end to the Grand Coalition was 
"unlikely."  Similar statements by Beck and SPD parliamentary 
caucus chief Peter Struck reflect long-standing discontent 
with the Grand Coalition in the SPD, but also resignation 
that it likely will survive until 2009.  Electoral math 
indicates that early elections would be a highly risky 
proposition for both major parties.  At the moment, neither 
the CDU/CSU nor the SPD could form a majority coalition with 
a single smaller party. 
 
¶7.  (C) Comment:  The path is not completely rosy for Merkel. 
 After her successes at the G-8 and EU summits, Merkel is now 
expected to deliver on the domestic front, where (despite 
declining unemployment) other successes have been 
painstaking.  The CDU likely hopes that Merkel's summit 
successes will provide a tailwind that will sustain her poll 
numbers, but foreign policy victories may prove fleeting, as 
public memory of the summits fades.  The SPD will want for 
now to claim its share of the credit for Germany's recent 
success in international affairs, as it has already done in 
the case of the labor market, and Foreign Minister Steinmeier 
remains quite popular with the public.  Our contacts at SPD 
headquarters suggest the SPD will try to take the initiative 
in setting the domestic agenda, using the lack of substantive 
progress on issues such as the minimum wage as an indictment 
of Merkel and the CDU/CSU, including in January 2008 state 
elections.  End comment. 
TIMKEN JR