Merkel Shifts Focus to Economy From Debt as State Election Nears

German Chancellor Angela Merkel said she’ll make jobs and growth a priority in this election year, in comments that indicate a shift away from focus on the European debt crisis.

“For us it’s clear that’s what economic competence and keeping up Germany’s wealth means,” Merkel said at a meeting of her Christian Democrats today in the North Sea port of Wilhelmshaven. High-quality jobs with fair pay will be the priority, said the Chancellor, who’s seeking a third term in September elections.

The speech is the first of seven by Merkel in Lower Saxony which holds state elections on Jan. 20. In a 12-page declaration agreed to at the talks, Merkel’s CDU makes scant reference to the debt crisis other than pledging sound budgets and vowing to keep Germany out of any debt union with its euro bloc partners that might entail joint bonds or pooled debt.

As Europe’s biggest economy slows, a recovery in euro-area bond markets may help broaden voter support for Merkel. The markets “have calmed” Finance Minister Wolfgang Schaeuble said yesterday at a rally near Wilhelmshaven. He was alluding to a pledge by the European Central Bank to widen euro-area bond buying if necessary and vows by member states including Greece to deliver on austerity commitments.

Germany’s economic outlook has dimmed at the start of 2013 and Europe’s sovereign debt crisis is “far from over,” Merkel said in an address on German television on Dec. 31. “The reforms that we’ve agreed on are starting to take effect. Nevertheless, we still need a lot of patience.”

Job Creation

With the CDU and the main opposition Social Democrats espousing similar policies to solve the debt crisis, Merkel will likely focus on creating jobs to distinguish her policies from rivals, Deutsche Bank Research said in a note yesterday.

Just like Merkel’s national government, her CDU in Lower Saxony is seeking to stay in power with its Free Democratic Party coalition partner. The region is home to Volkswagen AG and is Germany’s second largest state by territory.

Led by incumbent Prime Minister David McAllister, the CDU polled 40 percent to the opposition SPD’s 34 percent in an Infratest survey released Jan. 3. McAllister’s FDP allies, who hold a national convention in Stuttgart tomorrow, polled 4 percent, which wouldn’t be enough to win any seats in parliament given Germany’s election threshold of 5 percent.

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