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Soothing tensions

January 17, 2010

German Chancellor Angela Merkel met her coalition allies on Sunday to thrash out agreements in key policy areas after a bitter row over tax cuts and fiscal discipline threatened to rock her cabinet.

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Merkel
The ruling coalition has suffered some set backs in the past few monthsImage: AP

Merkel met with her foreign minister and leader of the Free Democrats, Guido Westerwelle, and Horst Seehofer, head of the Christian Social Union (CSU) on Sunday, January 17.

No statements were made after what media described as a "crisis meeting."

Merkel's coalition government has hit a rocky terrain in the past few months, as internal arguments have sprung up over issues such as tax policy, Turkey's bid to become an EU member, and the Afghan mission.

"The new coalition has got off to a very poor start, especially in tax questions," said Gerd Langguth, a professor of political science at Bonn University.

Tax breaks controversial

Money
Members within Merkel's own party oppose the tax cut planImage: dpa/PA

At the heart of the internal dispute between coalition members is the question of proposed tax breaks for German citizens. The business-friendly Free Democrats (FDP) are in favor of a plan to allow deep tax breaks, with Westerwelle saying it is "absolutely the core priority" for his party.

The recession has dealt a huge blow to the federal budget, and the government says it will have to add a record 85.8 billion euros ($123.4 billion) in new debt this year.

However, even some of Merkel's own Christian Democrats as well as state and local leaders are opposed to the idea, saying a tax giveaway would only add to the already extremely large debt the government is currently facing.

A survey done by German daily Bild showed 57 percent of voters expected the coalition to go ahead with the tax cuts despite the negative state of public finances.

Merkel's image hurting

Merkel
The in-fighting has lowered Merkel's popularity among GermansImage: picture alliance / dpa

The recent in-fighting between the ruling coalition parties has taken a toll on the government's public image. A recent survey by the Forsa institute showed that opposition parties actually had higher support than the coalition for the first time since the Merkel started her second term.

As for Merkel herself, a Dimap survey in early January showed public satisfaction with Merkel's job performance went down 11 points from the previous month, bringing it to 59 percent.

Another survey showed 52 percent of voters felt Merkel was not doing enough to set a direct course of action for the government.

mk/AFP/ap/dpa

Editor: Toma Tasovac