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OO RUEHAG RUEHROV RUEHSR
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O 230840Z DEC 08
FM AMCONSUL MUNICH
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C O N F I D E N T I A L SECTION 01 OF 02 MUNICH 000423

SIPDIS

E.O. 12958: DECL: 12/22/2018
TAGS: PGOV GM
SUBJECT: GERMANY/BAVARIA: GERMAN COALITION PARTIES
QUARRELING

REF: A. MUNICH 355
¶B. MUNICH 351

Classified By: Consul General Eric Nelson for reasons 1.4 (b) and (d).

SUMMARY 
-------

¶1. (SBU) The Bavarian Christian Social Union (CSU),
dangerously weakened, is attempting to sharpen its profile
among Bavarian and national voters, by pursuing an aggressive
economic campaign that diverges from that of its sister
party, Chancellor Merkel's Christian Democrats. The CSU is
finding plenty of opportunities to profile itself locally and
nationally in addressing the challenges presented by the
financial crisis. For one, Bavarian Minister President
Seehofer has threatened to boycott the January 5 "coalition
summit" if Chancellor Merkel does not bend to the CSU's
recipe for responding to Germany's economic downturn through
a tax reform proposal. Merkel needs a strong CSU showing in
Bavaria to achieve her goal of a CDU/CSU-FDP coalition after
the 2009 national elections, but the CSU's strategy could
build tensions between the sister parties. How the CDU-CSU
divisions play out could influence national economic policy
as well as how the upcoming campaign will shape up in the
months to come. End Summary.


CSU SALTING THE CDU'S SOUP 
--------------------------

¶2. (SBU) The CSU still holds Chancellor Merkel partly
responsible for the CSU's poor outcome in the September 2008
state elections. Merkel failed to support the CSU, for
example, on the tax deductibility of commuting costs, one of
the CSU's key issues that the CDU had rejected until the
latest ruling by the Federal Constitutional Court that agreed
with the position of the CSU. Erwin Huber, former head of
the CSU, said "the CDU should have listened to us instead of
Finance Minister Steinbrueck (SPD) on this sensitive issue."

¶3. (C) Karl-Theodor zu Guttenberg, Secretary General of the
CSU (PROTECT), told the Consul General on December 17 that
the CSU is "heating up the debate" and will meet on January 4
"to map out a strategy for the 2009 election campaign,"
adding, "We want to be more like the party was under Edmund
Stoiber and Franz Josef Straus (both legendary former
Minister Presidents)." Or, as Hartmut Kotschyk (CSU party
whip in the Bundestag) put it to the P/E Chief recently, "We
want to be the salt in their soup."

¶4. (C) Zu Guttenberg and Koschyk reviewed possible
approaches the CSU would take with its platform for 2009.

a) Taking a hard line against EU membership not only for
Turkey but also for Ukraine. The CSU could lump Turkey and
Ukraine together so neither country could feel singled out
for bad treatment. The CSU's new foreign policy spokeswoman
in the Bundestag, Dorothee Baer, told Berlin PolMC that this
would be a focus of the CSU's campaign for European
Parliament elections in June 2009.

b) Insisting on more EU "subsidiarity." The CSU wants more
respect for national and regional and local prerogatives in
governance and administrative control, such as allowing
restrictions on bioengineered seeds.

c) Strengthening and refocusing the economy. The CSU wants
a renewed commitment to human over financial capital as a way
to address what Koschyk called "a believability problem among
the rank and file Germans for the market economy." Zu
Guttenberg complained that "Merkel was not being assertive
enough on the economy," echoing recent statements by Horst
Seehofer, Bavarian Minister President (CSU). However, he
also admitted that he could understand her approach since he
found her to be "personally conservative" and "not one to be
in the front on bold initiatives." He expected she was
"trying to maintain her options in 2009" as well as "trying
to stay close to the coalition Social Democratic Party (SPD)."


BAVARIA'S PRESIDENT CUTTING A MEAN FIGURE 
-----------------------------------------

¶5. (SBU) Finally, MP Seehofer has criticized the CDU in
public around Bavaria, in Berlin, and in the media, which
reported that CDU leaders viewed his actions as
"unpredictable" because he made proposals that strayed from

MUNICH 00000423 002 of 002


the coalition's party line. He criticized the Chancellor's
economic course, for example, arguing that Germany needed a
larger and more meaningful program than the Chancellor had
supported. Seehofer preserved the independence of Bavarian
control over the Bayerische Landesbank (BayernLB) by
rejecting the Federal rescue package in an attempt to use
only Bavarian resources. And, he pushed for immediate tax
deductions, not just some time after the election.

COMMENT: CREATING INDIVIDUALITY WITHOUT KILLING EACH OTHER 
--------------------------------------------- -------------

¶6. (C) Chancellor Merkel and the CDU need a strong and
cooperative Bavarian CSU partner in order to win the 2009
Bundestag election. Down in Bavaria, the CSU must get
stronger, too, and is fighting for its uniqueness as a
regional party with national and international credentials.
Although the ultimate goals are compatible, the CSU
necessarily must set itself apart from the CDU to prove
itself to skeptical locals who knocked the CSU off its high
horse in the last election. The challenge for both parties
is to allow the CSU to profile itself without killing the
relationship, and each other's chances, with an overly
aggressive factional campaign.

¶7. (U) Track Munich reporting at
xxxxx
NELSON