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Merkel CDU Says Euro Future Hinges on Low Debt

Staying the course on debt reduction and measures to boost competitiveness are the prescriptions for ending the euro region crisis, German Chancellor Angela Merkel’s party says in a draft paper for her re-election campaign.

The 10-page platform for the Christian Democratic Union suggests that Merkel, who is running for a third four-year term in Sept. 22 elections, will stick to positions staked out during the debt crisis that have made her popular in Germany and resented in southern Europe.

“The answer to the sovereign-debt crisis must be greater competitiveness in Europe” and lower budget deficits, the CDU document obtained by Bloomberg News says. “This is the only path that leads to growth and new jobs and strengthens Europe.” Pooling euro-area debt, including with so-called euro bonds, is rejected because it “would weaken Europe.”

Merkel consistently ranks as Germany’s most popular politician in polls, allowing her to run on the domestic standing built up during the crisis. Her decision to hold the euro area together, solidified as the crisis peaked in 2011, is reflected in the paper, which says the 17-nation currency has “overwhelming importance” for Europe’s economy.

The document lists 10 proposed themes, including the economy, family policy, technology and law and order, for the CDU’s platform, which the party plans to present on June 24. Working for a European Union-U.S. free-trade agreement, stronger rules for financial markets and reducing Germany’s national debt starting in 2016 are other election themes cited in the paper.

Its euro area proposals include more investment in education, research and technology and extending Germany’s vocational training system to other countries. “Our goal remains to lead a strengthened Europe out of the crisis together with our partners,” the paper says.

Poll Results

Her CDU and its Christian Social Union Bavarian affiliate dropped a point in the week to score 40 percent in a Forsa poll published May 29. Their Social Democrat main rivals polled an unchanged 24 percent. Merkel wants to perpetuate her coalition with the Free Democrats, who garnered 4 percent compared with the 14 percent for the SPD’s favored allies, the Greens.

The Merkel coalition bloc gained power in 2009 by winning 48 percent of votes to the SPD and Greens 37 percent combined.

The CDU leadership will add detail to the outlines of the paper that’s titled “What’s Close to My Heart” before it is presented to the public by Merkel and CSU Bavarian Prime Minister Horst Seehofer on June 24.

The draft shows that Merkel would not raise tax while burdens on the budget would rise under a plan to equalize pensions paid to mothers with offspring born before and after 1992 and a reduction of tax for adults bringing up children.

FDP Opposed

Finance Ministry spokesman Martin Kotthaus yesterday said the plans would cost some 7 billion euros ($9 billion) annually, a quarter of the bill estimated in a May 30 report in Handelsblatt. Cited in the same newspaper on June 1, FDP caucus chief Rainer Bruederle said his party wouldn’t back measures that would create a new budget deficit.

Merkel today is inspecting three regions in southern and eastern Germany blighted by floods, aiming to “raise the spirits” of volunteers and emergency services that are working round the clock to contain the disaster, government spokesman Steffen Seibert said yesterday.

Her tour echoes steps by her predecessor, Gerhard Schroeder, whose visits to the 2002 flood-affected regions are credited by pollsters with helping him win a second term in federal elections weeks later.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Tony Czuczka in Berlin at aczuczka@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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