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German policy changes possible after Merkel debacle


German Chancellor Angela Merkel and Christian Democratic Union party (CDU) candidate Lower Saxony state premier Christian Wulff (R) wait to hear the result of the German presidential election, at the Reichstag in Berlin June 30, 2010. REUTERS/Wolfgang Rattay
German Chancellor Angela Merkel and Christian Democratic Union party (CDU) candidate Lower Saxony state premier Christian Wulff (R) wait to hear the result of the German presidential election, at the Reichstag in Berlin June 30, 2010. REUTERS/Wolfgang Rattay

By Stephen Brown

BERLIN (Reuters) - German Chancellor Angela Merkel's government called for unity on Thursday after rebels forced a humiliating vote over the presidency that could lead to a watering down of her austerity package.

The struggle to get Christian Wulff elected to the largely ceremonial post of head of state on Wednesday, even when Merkel had a clear majority on paper, showed growing disenchantment with the leadership of her nine-month-old center-right alliance.

Analysts said party cadres sent a clear message to Merkel that she needed to make major changes and possibly tone down her recent 80 billion euro austerity drive, criticized at home as unfair and abroad as likely to hinder the world recovery.

Coming in the wake of a series of resignations that deprived Merkel's Christian Democratic Union of its most experienced figures -- as well as Horst Koehler's sudden departure from the presidency after comments he made while visiting German troops in Afghanistan -- the vote cast doubts on her future.

Dozens of members of parliament from Merkel's coalition twice voted against Wulff, in the special assembly, with most of the rebels only obeying in the third round when Merkel and her two top coalition partners made a personal plea for unity.

"The coalition has to improve its teamwork. Now we've got a chance to show that. We've got the message: we've got to start working better as a coalition," said the second in charge of Merkel's CDU, Hermann Groehe, on German television.

Some newspapers called it a "disaster" for the government and especially Merkel and her main ally, Guido Westerwelle of the liberal Free Democrats, who is her foreign minister.

The conservative Frankfurter Allgemeine Zeitung said it "darkened the already dim prospects of the ruling alliance" and the center-left Sueddeutsche Zeitung said: "Merkel's name was not on the ballot but she was the big loser."

"Merkel and Westerwelle are fighting for their political survival," said the business daily Handelsblatt.

SQUANDERED OPPORTUNITY

"The coalition is at the moment not capable of managing the issues and strategies of the day -- and it's not able to convince the public," said Wolfgang Gerhardt, a former chairman of the Free Democrats.

In the same way that the austerity package was supposed to give Merkel a chance to assert her leadership -- but instead turned out to undermine her -- the presidential vote also failed to work as another opportunity to jump-start the government.

"The coalition needs to be a little more self-critical. It's got to think deeply about where it wants to go. It squandered the chance to get off to a fresh start," said the conservative state premier of Saxony, Stanislaw Tillich, on local radio.

The disarray in the 55-year-old chancellor's government is all the more surprising given the historic setback suffered by the main opposition Social Democrats in last year's national election, and the current strong recovery in the German economy.

The government is confident the economy will grow much more than its official 1.4 percent forecast this year and Economy Minister Rainer Bruederle used good retail sales data to liken Germany's economy to its national team's strong World Cup soccer performance.

"Germany is back -- not just in sports, but also in terms of the economy," Bruederle told parliament.

(Additional reporting by Klaus-Peter Senger, Brian Rohan and Erik Kirschbaum; writing by Stephen Brown, editing by Peter Millership)

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