Public Security chief launches digital vehicle plate wallet service    'Action is in our nature': 4th Saudi Green Initiative Forum to be held at COP16    Pop hit APT too distracting for South Korea's exam-stressed students    Saudi Arabia's inflation rate hits 1.9% in October, the highest in 14 months    Mohammed Al-Habib Real Estate Co. sets Guinness World Record with largest continuous concrete pour    PIF completes largest-ever accelerated bookbuild offering in MENA region    Saudi Arabia signs renewable energy program with Azerbaijan, Kazakhstan and Uzbekistan at COP29    Australia and Saudi Arabia settle for goalless draw in AFC Asian Qualifiers    Human Rights Watch accuses Israel of mass displacement in Gaza amounting to war crime    Thousands of protesters march in Paris ahead of tense football match between France and Israel    Republicans win 218 US House seats, giving Donald Trump control of government    UN sounds alarm at Israel's 'severe violations' at key buffer zone with Syria    Order vs. Morality: Lessons from New York's 1977 Blackout    Saudi, Indian foreign ministers co-chair Cooperation Committee meeting in New Delhi    South Korean actor Song Jae Lim found dead at 39    Don't sit on the toilet for more than 10 minutes, doctors warn    'Marvels of Saudi Orchestra' to dazzle audience in Tokyo on Nov. 22    Saudi Champion Saeed Al-Mouri scores notable feat in Radical World Championship in Abu Dhabi with support from Bin-Shihon Group    Rita Ora is tearful in tribute to Liam Payne at MTV Awards    France to deploy 4,000 police officers for UEFA Nations League match against Israel    Al Nassr edges past Al Riyadh with Mane's goal to move up to third    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Merkel in risky bid to revive fortunes with cuts
By Madeline Chambers
Published in The Saudi Gazette on 05 - 06 - 2010

Germany's Angela Merkel has hit a low point in her chancellorship, and her decisions in the coming days on tackling the budget deficit and who to back as president may determine whether she bounces back or is politically doomed.
Beset by a slump in popularity and a drubbing in a state election last month, and accused at home and abroad of weak leadership in the euro zone debt crisis, Merkel has also seen two high profile allies quit unexpectedly within a week.
This weekend, however, she has the opportunity to turn things around.
On Sunday and Monday she meets cabinet ministers to thrash out how to cut the bulging budget deficit, and she is also about to decide on a candidate for president after incumbent Horst Koehler's shock resignation this week.
“Merkel is standing on the edge of an abyss. But she has a chance to step back from it if she takes the right decisions in the next few days,” said Nils Diederich, a politics professor at Berlin's Free University. He put her chances of success at about 50-50.
A poll this week put support for Merkel's conservatives on 30 percent, their lowest in nearly four years, and support for her Free Democrat (FDP) coalition partners has roughly halved since September's election.
A plethora of problems has made her look vulnerable and given ammunition to rivals and even some in her own party who accuse her of weak leadership during times of crisis.
“Quite simply, the chancellor is in a crap position,” a Merkel aide told the Sueddeutsche Zeitung daily, while Bavarian Health Minister Markus Soeder said she was facing “days of reckoning”.
Budget crunch
Most crucial will be how she tackles the state finances.
Although the budget deficit in Europe's biggest economy won't be as large as those in many euro zone states this year, the government expects it to top five percent of gross domestic product - significantly above the EU cap of three percent.
Merkel and her hard-nosed Finance Minister Wolfgang Schaeuble have already disappointed many voters - and their FDP partners - by scrapping planned tax cuts for 2011 and 2012.
They have warned of tough times ahead and say savings and spending cuts are the order of the day. They are bound by law to cut the structural deficit by 10 billion euros and the June 6-7 talks will agree the basis of the government's 2011 budget.
“The euro zone crisis has made voters worry about jobs and inflation and they are irritated Merkel has given little sense of direction. This makes the weekend meeting on budget cuts pretty crucial,” Manfred Guellner, who heads polling group Forsa, told Reuters.
For economists and voters alike, the key question will be whether the government backs spending cuts or tax increases - or opts for a combination of the two.
Possible increases in value-added tax and tobacco duty could fuel criticism that Merkel is endangering a fragile economic recovery and experts say she must persuade her ministers to slash spending.
“Merkel needs an austerity drive. If ministers agree to budget discipline without tax hikes, she could present it as a breakthrough and her position could stabilize,” said Diederich.
He said it was unclear whether she would win the necessary backing of ministers from the FDP and Bavarian Christian Social Union (CSU) who did not want to look to be bowing to pressure.
Some analysts say that, to regain the initiative, Merkel needs a flagship policy comparable with former Social Democrat Chancellor Gerhard Schroeder's “Agenda 2010” labor market reform which defined his second term.
But Merkel is aware of the risks inherent in an austerity package. The deeply unpopular Agenda 2010 helped the economy by cutting welfare costs but also heralded Schroeder's downfall.
Merkel biographer Gerd Langguth said the cautious chancellor may try to play down her package to avoid scaring off voters. “Merkel is pragmatic and unideological. I doubt she will use an ideological headline to sell her policy,” he said.
Mountain of problems
Another urgent question for Merkel is who she can get to succeed Koehler as president after his shock resignation.
Critics view his departure as a defeat for Merkel. They say she failed to back Koehler when he came under fire over comments he made about the army, even though he was her own candidate for president in 2004.
Merkel said she tried to persuade Koehler to stay and Spiegel Online reported that she warned him that resigning could trigger a crisis, and even shake public faith in state institutions.
His resignation, coupled with last week's exit from politics of Hesse state premier Roland Koch, a prominent ally who leaves a gap on the right of the conservative camp, has given the impression of rats abandoning a sinking ship, say commentators.
Merkel has been left scrambling to find a successor who will be elected by a special parliamentary assembly on June 30.
She may well get her choice - whoever it ends up being - through the assembly, where her coalition has a majority, but any hiccup would undermine her further.
Compounding her troubles is the need to persuade opposition parties to back her policies in the Bundesrat upper house as her center-right coalition lost its majority there after a vote in the state of North Rhine-Westphalia last month.
The 2011 budget has to get through the Bundesrat, as do plans to extend the lives of some nuclear power stations.
Commentators say now is Merkel's chance to prove she is more than a fair weather chancellor. In her trademark matter-of-fact style, she has dismissed suggestions she isn't up to the task.
“You grow according to the challenges you are confronted with,” Merkel told a television interviewer this week.
She has little option but to do just that.


Clic here to read the story from its source.