Sept. 18 (Bloomberg) -- Chancellor Angela Merkel said that Germany’s election in four days will be a referendum on the euro’s future stability, as she appealed to voters to reward her handling of the debt crisis with a third term.
Merkel, speaking at a rally of her Christian Democratic Union party in the eastern city of Magdeburg, cast the national vote on Sept. 22 as a decision between her policy of conditional bailouts for weaker euro countries and what she portrayed as plans by Germany’s opposition to pool the currency bloc’s debt.
“As we stabilize the euro -- and that’s one thing you are deciding about on Sunday -- there are different approaches,” Merkel told the crowd of several thousand yesterday, some of whom held aloft orange “Angie” signs. “We offer aid when we get something in return.”
The Social Democrats led by Peer Steinbrueck and the Greens, which aim to unseat Merkel and form a coalition, advocate a joint debt repayment fund and other options that would “throw all of the debt into one pot,” she said. “That is why your decision is also about Europe’s future path.”
Merkel, in power since 2005, is campaigning on her economic stewardship and her insistence on reforms in exchange for aid during the debt crisis that began in Greece in 2009 and spread to Ireland, Portugal, Spain and Cyprus. Her message of a safe hand on the tiller was bolstered yesterday as German investor confidence climbed to the highest level in more than three years after the benchmark DAX index rose to a record the previous day.
“We in Germany are really satisfied with the job Angela Merkel did,” Rupert Stadler, chief executive officer of carmaker Audi AG, said yesterday in an interview with Bloomberg Television. She listens to industry problems and acts, so that “in the last months and years we have good stability now in Germany,” he said.
Steinbrueck, Merkel’s first-term finance minister turned main election challenger, says her austerity push has divided Europe and advocates more emphasis on growth. At home, she has neglected Europe’s biggest economy, showing “guidelines but no direction,” he said yesterday at a separate rally in Wuppertal, in the SPD-controlled state of North Rhine-Westphalia.
“The gap between rich and poor has clearly grown in Germany,” Steinbrueck said, defending SPD plans to raise the top rate of income tax to 49 percent from 42 percent and to impose a “wealth tax.” Banks must “finally’ be called upon to pay for the crisis they spawned, and his party would ban “speculative trades” on commodities and foodstuffs, he said.
Steinbrueck’s strength “is his power of economic judgement, something that Merkel lacks,” Helmut Schmidt, the former Social Democratic chancellor, was cited as saying in an interview published in Bild newspaper today.
For all Merkel’s clear lead over Steinbrueck in approval terms, latest polls suggest the race is too close to call as a result of Germany’s coalition system of government. Support for Merkel’s Christian Democratic bloc held at 39 percent in a weekly Forsa poll for Stern magazine published yesterday, while her Free Democratic coalition partner lost a percentage point to 5 percent, the threshold to win parliamentary seats.
Steinbrueck’s SPD was unchanged at 25 percent, and the Greens held at 9 percent. The anti-capitalist Left had 10 percent, also unchanged. That leaves neither main bloc with a majority, according to Stern. Forsa polled 2,502 voters on Sept. 10-16. The margin of error was as much as 2.5 percentage points.
Merkel presided over the final cabinet meeting of her second term in Berlin today before campaigning in Schwerin in northeastern Germany and then in Hamburg. Steinbrueck is in North Rhine-Westphalia, Lower Saxony and then also in Hamburg.
The chancellor winds up her campaign on Sept. 21 in Berlin and in Stralsund, the main city in her electoral district on the Baltic Sea. Steinbrueck will hold his final rally in Frankfurt, the main city of Hesse state, which holds regional elections on the same day as the federal ballot.
The most likely outcome on Sunday is a national “grand coalition” of the two main parties, that “would probably not have an easy start,” Carsten Brzeski, senior economist at ING Group NV in Brussels, said in a Sept. 16 note. “Negotiations on content, portfolios and persons could take some time,” with tax policy “the most controversial topic.”
Merkel, speaking in Magdeburg, again rebuffed her FDP partner’s call for help to reach the 5 percent mark, saying that every vote must go to her own party. Citing joblessness that has declined from more than 5 million to less than 3 million on her watch, she urged supporters to turn out and cast ballots for her party even if they like her more than the CDU.
“We had four good years and I want us to have more good years,” she said. “You only get Merkel if you vote for the Christian Democratic Union.”
Thirty percent of voters remain undecided, an Allensbach study published in today’s Frankfurter Allgemeine Zeitung found.
“An election campaign only comes to the end immediately before the vote,” Gerhard Schroeder, the SPD chancellor who led a coalition with the Greens from 1998 to 2005, was cited as saying in Bild. “So long as you don’t give up, anything’s possible.”
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