Merkel's Coalition Settles on Programs to Bolster Popularity

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BERLIN -- Leaders from Chancellor Angela Merkel's coalition on Monday agreed on a raft of changes to social welfare programs aimed at easing costs for average Germans and bolstering the government's sagging popularity before national elections next year.

After nearly eight hours of negotiations that ended early Monday, the leaders agreed to scrap an unpopular quarterly medical fee of €10, or about $13, introduce a bitterly disputed child-care subsidy, assist impoverished retirees and aim for a balanced budget by 2014.

Dissension has dominated Ms. Merkel's coalition since it came to power in 2009. Recent polls show that while her Christian Democratic Union remains popular, its coalition partner, the Free Democrats, has slid below the 5 percent threshold needed for representation in Parliament.

Opposition parties criticized the coalition for horse-trading, saying it came at the cost of families and the working class. Sigmar Gabriel, the Social Democrats' chairman, criticized the measures as "mock solutions to win the appearance of a mock peace."

Ms. Merkel's spokesman, Steffen Seibert, said the measures would ensure solid financial footing for Germany, while supporting its infrastructure and social fabric.

"If everything in politics that involves a common search for the best way forward is horse-trading," he said, "then I think that we are not doing justice to politics as a whole and, in particular, this government."

The Social Democrats, along with the opposition Greens, have threatened legal steps against the child-care subsidy that, starting in August, will offer monthly payments of €100 to parents who do not send their 1- and 2-year-old children to state-financed day care. The subsidy has been a pet project of the Bavaria-only wing of the Christian Democratic Union that is seeking to maintain the support of its traditionally conservative voter base.

The Free Democrats had opposed the child-care subsidy, but they agreed to support the measure in exchange for dropping the quarterly fees that Germans insured through the public health care system have been required to pay since 2004. The move is expected to amount to savings of about €2 billion annually for those insured.

Studies have shown that Germans visit their doctors at twice the rate of their fellow Europeans, and the fee had been intended to ease the strain on the country's public health system and encourage Germans to think twice before scheduling an appointment.

But calls for retracting the fee -- equally hated by patients who paid it and health providers who were required to deal with the bureaucracy it involved -- increased after the public health system reported record contributions this year. In the first six months of 2012, the surplus in public health coffers amounted to €4.9 billion, largely generated by the country's strong job market.

The vigorous labor market has also contributed to record tax revenues for 2012, amounting to more than €602 billion. Announcing the figures last week, Finance Minister Wolfgang Schäuble said they would allow Germany to balance its budget by 2013, three years earlier than the currently set legal target.

Mr. Schäuble, who was in Mexico for a meeting of the Group of 20 and did not attend the negotiations, had warned that tax revenues were expected to taper off in the coming years. Recent figures have shown that Germany's economy is cooling as the impact of the three-year-old debt crisis is felt in Europe's strongest economy.

Yet Philipp Rösler, leader of the Free Democrats, insisted that Germany was setting a good example for Europe by meeting its fiscal target two years ahead of schedule.

"We can hardly ask our European friends, neighbors and partners to balance their budgets in the most difficult of times if we are not able to balance our own budget in times of record tax revenues," Mr. Rösler said.

A survey released by the Emnid agency on Sunday showed the Free Democrats getting only 4 percent support, compared with the 14.6 percent they won during the 2009 election.

Although 38 percent of those surveyed said they supported the chancellor's party, that would not be enough to keep the current center-right government in power and Ms. Merkel would be compelled to seek a new partner.

Experts say it is too early to tell whether their success in doing away with the extra health care fee will be enough to tip support back in favor of the Free Democrats.

"The F.D.P. needs to do a thing or two to convey results to their voters," Jürgen Dittberner, a political scientist at Potsdam University, told the public television broadcaster ARD. "Whether they are skillful enough to succeed, I would rather not say."

world

This article originally appeared in The New York Times.


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