Länder name price for supporting Berlin
By Gerrit Wiesmann in Berlin
Powerful regional politicians in Germany’s ruling coalition have called for a financial-transaction tax and spending cuts by indebted eurozone governments as the price for their agreement to the €750bn euro rescue package.
Horst Seehofer, head of the Bavarian Christian Social Union, sister party of chancellor Angela Merkel’s Christian Democrats, demanded the government in Berlin finally push for tougher regulation “without any ifs and buts”.
Since the legislative push at the start of May, Ms Merkel’s political capital has eroded as a poor showing for Christian Democrats in a key regional poll came hand in hand with the last-minute agreement in Brussels about more aid.
Political headwinds have been heightened by popular unease about the size and speed of the eurozone packages. A recent survey by polling group Allensbach showed 47 per cent of Germans now wanted the return of the Deutschmark.
Government officials insist the conservatives and their Free Democrat coalition partner will pass the aid package. But the Merkel administration is beset by calls that could turn the vote, scheduled for Friday, into a nail-biter.
The opposition Social Democrats – whose support Ms Merkel would like as a sign of national unity to the EU – signalled they would also abstain from the second emergency-aid vote if Berlin continued to resist a transaction tax.
But it was Mr Seehofer’s open break with the chancellor – over a tax she deems unworkable for lack of international support – was a sign of how much Ms Merkel’s authority has suffered in past days even in conservative ranks.
With the Christian Democrat governor of North Rhine-Westphalia, Jürgen Rüttgers, in danger of losing office after state elections on 9 May, conservative governors fear Berlin’s policies could bring more of their colleagues to disaster in regional polls.
Alongside Mr Seehofer, the governor of Bavaria, Stefan Mappus, the Christian Democrat governor of Baden-Württemberg, demanded Berlin stop “flip-flopping” over policy goals like extending the lives of nuclear power-stations.
Roland Koch, the conservative governor of Hesse, fired a salvo in what looks set to be a fierce debate about public spending when he called for cuts in kindergartens and schools – areas which Ms Merkel earmarked for extra funds.
Germany passed a constitutional amendment last year obliging federal and state governments to reduce public deficits continually from 2011 – a rule Berlin has said will force €10bn in annual spending cuts at federal level alone.
Finance minister Wolfgang Schäuble will later this week push for other eurozone nations to adopt similar debt-limits, a move that could soothe Ms Merkel’s domestic critics, while provoking firece opposition in the eurozone.