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Angela Merkel's fiscal treaty in trouble at home in Germany

May 15, 2012 |  8:38 am

German opposition leaders have told Chancellor Angela Merkel that they won't approve her cherished treaty on European fiscal restraint unless their conditions are met
BERLIN -- She insists that austerity is key to solving Europe's debt crisis and that other countries have to practice it, but German Chancellor Angela Merkel is having trouble getting her beloved treaty on fiscal restraint ratified in her own country.

Hours ahead of a visit to Berlin by newly sworn-in French President Francois Hollande, who wants to renegotiate the pact, leaders of Germany's main opposition party delivered some unwelcome news to Merkel: She's going to have to play by their rules if she wants the German parliament to approve the treaty.

That would include supplementing the pact with a tax on financial transactions and measures to boost jobs and growth in a region that has seen several economies contract under stringent austerity regimes of the kind Merkel approves.

And as for bringing the measure, which would put a cap on public spending, to a vote later this month, as Merkel wants: Not going to happen, the opposition leaders say.

"The administration's schedule is off the table," Frank-Walter Steinmeier, the parliamentary leader of the Social Democrats, said Tuesday.

Merkel's Christian Democrats and their coalition partners, the Free Democrats, hold a majority in the Bundestag, the lower house of parliament. But the treaty would mean a change to the country's constitution, which requires a two-thirds majority in both the Bundestag and the Bundesrat, the upper house. For that, Merkel must rely on backing from opposition parties.

Beyond that, she is also facing a challenge from Hollande, who pledged repeatedly on the campaign trail that he would renegotiate the pact. Merkel has so far remained adamant that the accord, which was signed by 25 European leaders in March but still needs ratification in most of their countries, is "not negotiable."

In Germany, the Social Democrats, or SPD, have been emboldened by their Socialist ally Hollande's election victory early this month over Merkel's preferred candidate, incumbent Nicolas Sarkozy. In addition, on Sunday the SPD scored a decisive win over Merkel's party in an election in Germany's largest state, North Rhine-Westphalia.

Merkel's Christian Democrats were quick to strike back at the SPD's suggestion that the fiscal treaty couldn't be approved before the parliament's summer break. Peter Altmaier, the ruling party's parliamentary floor leader, accused his opponents of "gimmicks and irrelevant connections" and of "tying important European plans to the implementation of national political wishful thinking."

Still, the Social Democrats' announcement Tuesday left Merkel in the awkward position of trying to persuade Hollande to accept the fiscal pact without any clear sense of when or how her own country will ratify it.


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-- Aaron Wiener

Photo: Frank-Walter Steinmeier, right, the parliamentary leader of Germany's Social Democrats, and two other members of his party hold a news conference Tuesday on the European fiscal treaty pushed by Chancellor Angela Merkel. Credit: Odd Andersen / AFP/Getty Images