Angela Merkel's New Strategy

By David Wroe

BERLIN, Germany - With considerable solemnity, Germany's chancellor, Angela Merkel, assured voters last month that this fall would be a "fall of decisions."

The voters, who felt that governments should probably be making decisions all the time, were underwhelmed.

"I had to laugh at that," said Berlin resident Lukas Hummel, 38, who was having a beer on a recent evening in the German capital's trendy Hackescher Markt area. "I hope she follows with a winter of decisions, a spring of decisions and a summer of decisions. But I wouldn't bet on it."

If the Bill Clinton campaign slogan, "It's the economy, stupid," were a watertight rule of politics, Merkel's approval rating would be soaring. Europe's largest economy is booming and the jobless rate has fallen to its lowest level in 18 years. Confidence is strong and the recession is shrinking in the rearview mirror.

But none of this is helping the 56-year-old leader of Germany's conservative Christian Democratic Union (CDU). Just over a year into Merkel's second term, her coalition government has earned the ire of voters for its internal bickering and lack of direction.

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The CDU won a strong mandate last September with its ideal coalition partners, the pro-business, low-tax Free Democratic Party. Yet the parties have clashed noisily on health care, taxes, Afghanistan - you name it.

Merkel, a leader who prefers to sit above the fray and moderate the debate rather than push ideological visions, has struggled to keep her troops in line.

At home, her approval rating has slumped 7 percent in the latest poll to 41 percent. After years as the nation's most popular politician, she now ranks sixth. Last week, Forbes magazine's list of the world's most powerful women dropped Merkel to fourth place from first - a position she had held for the four previous years running.

But Merkel isn't sitting still and accepting her decline. The "fall of decisions" is not empty rhetoric, political observers in Germany say. Facing six state elections early next year, and left with little choice but to step up to the plate, Merkel, normally the definition of politicial caution, has begun to take risks.

An instinctive moderate and pragmatist, Merkel has in the past couple of months begun shifting to the right. She polarized the electorate with an extension of the lifespans of Germany's 17 nuclear reactors. She shook the notion of Germany's cherished welfare state with a piddling 5 euros-per-month rise in benefits for the long-term unemployed after the country's highest court deemed the current rate of benefits unconstitutional.

Most uncharacteristically, she waded into a messy domestic issue: an expensive new rail link in the southwestern city of Stuttgart. After local protestors clashed with police, leading to more than 100 injuries, Merkel spoke out in favor of the rail project, even though the nation was shocked by violent images of demonstrators injured by police water cannons and pepper spray and a poll found that three-quarters of Germans sympathized with the demonstrators.

"This is a way for her to show that she has convictions, even if they are unpopular convictions ... and that she is a tough lady," said Gerd Langguth, a former CDU member of parliament and Merkel biographer who is now a political scientist at the University of Bonn.

It has been a dramatic tack. After public discontent reached a crescendo over the summer, Merkel reportedly sat down with her fellow coalition leaders and struck a deal to pick a firm - more conservative - course and stick together.

Merkel is both Germany's first female Chancellor and its first post-reunification leader to have grown up in the communist former east. As such, she represents a new era after decades of the western "boys club" of German politics. A former physicist, Merkel approaches issues analytically, studiously and with a self-effacing understatement.

This has set her apart from European colleagues, such as the energetic but scattered French President Nicolas Sarkozy. Merkel has learned to get her way by acting as a moderator among ambitious and egocentric men.

"Men try to convince people of their power. Mrs. Merkel is more consensus-oriented. But you cannot define that as having less power," said Langguth. "She never wanted to be like Margaret Thatcher."

This made Merkel an appealing problem-solver to the vast middle of the German electorate, especially during the financial crisis. But to quell the fighting in her own party and win back conservatives, Merkel is getting tougher, Languuth said.

One effect, some observers say, has been a retreat from European interests toward national priorities - a reprioritization made clear during the Greek debt crisis. Merkel dithered over a bailout in the hope of avoiding a voter backlash in a key state election in North-Rhine Westphalia. The resulting delay, critics say, ultimately pushed up the eventual price of the bailout.

"She has isolated Germany in Europe. She has lost authority by her behavior in the weeks and months around the Greek debt crisis," said Ulrich Deupmann, the director of Berlin political consultancy firm Ideas.ag. "In March and April nobody knew what she was doing for weeks. There was an absence of leadership."

The shift to the right, Deupmann says, is sheer necessity for Merkel. Two-thirds of voters in a recent poll believed the government lacked direction. It will be easier for her to build a consensus with her own coalition around a conservative agenda.

But the issues she has chosen so far were risky, said Gero Neugebauer, a political scientist at Berlin's Free University. The nuclear extension in particular smacked of a behind-closed-doors deal with big energy companies - an impression guaranteed to infuriate many Germans.

"The public was disappointed - even supporters of the conservatives," Neugebauer said. "The government made a mistake underestimating the resistance in the public."

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