Merkel teaches party to walk again

Angela Merkel cut her party's losses when a financing scandal paralysed Germany's Christian Democratic Union in 1999. Merkel, then general secretary, said former Chancellor Helmut Kohl should leave politics because of his role in setting up a system of illegal bank accounts.

"The party must learn to walk again," she wrote in the Frankfurter Allgemeine Zeitung. Merkel, who grew up in East Germany, was repudiating a leader who had helped her rise to Cabinet minister a year after German reunification in 1990. She became CDU chairwoman in April 2000.

Merkel, 50, is now the opposition's official candidate against Chancellor Gerhard Schroeder. Her party is still divided, this time over tax cuts and health care. If she can pull it together and become Germany's first woman chancellor, as polls indicate, she then will have to make good on her pledge to create jobs. Europe's largest economy is suffering from near-record unemployment of five million.

Ludwig Georg Braun, president of the DIHK chambers of industry and trade, said with CDU-led majorities in both houses of parliament, Merkel, a physicist, would have a mandate to reduce company payments to state health care and unemployment benefits, to ease rules on firing and to allow more flexibility on pay and work hours.

Under Merkel's leadership, the Christian Democrats have beaten Schroeder's Social Democratic Party in regional elections in a third of Germany's 16 states. Its most recent victory was on May 22 in North Rhine-Westphalia, Germany's most populous state and industrial heartland.

After that defeat in a region the Social Democrats had governed for 39 years, Schroeder, 61, said he would seek to hold federal elections on September 18, about a year earlier than planned. The official date for the vote will be set after a no- confidence vote in Parliament on July 1.

"Finding ways to create jobs for the people of Germany will be at the centre of my efforts," Merkel said yesterday. Her party would present its programme on July 11. 
 
Matthias Wissmann, who got to know Merkel when he was transport minister in Kohl's Cabinet for five years, says Merkel's economic concepts were "sensible and feasible".

First, Merkel has to use her party-leadership skills to keep up momentum on the national stage during the four-month campaign. A poll shows support for her as chancellor rose to 50 per cent, compared with 44 per cent for Schroeder.

But market research company managing director Hans-Juergen Hoffmann, says Merkel's East German and Protestant background, her late arrival on the party's centre stage and the fact that she's in her second marriage and has no children may upset traditional party voters.

- BLOOMBERG