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Viewing cable 09BERLIN168, GERMAN ECONOMICS MINISTER THROWS IN TOWEL
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09BERLIN168 | 2009-02-11 06:06 | 2010-11-28 18:06 | CONFIDENTIAL | Embassy Berlin |
VZCZCXRO8118
PP RUEHAG RUEHROV RUEHSR
DE RUEHRL #0168/01 0420612
ZNY CCCCC ZZH
P 110612Z FEB 09
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 3262
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUCNFRG/FRG COLLECTIVE PRIORITY
RUEHRL/AMCONSUL DUSSELDORF PRIORITY 0187
RUEHFT/AMCONSUL FRANKFURT PRIORITY 7859
RUEHAG/AMCONSUL HAMBURG PRIORITY 0263
RUEHMZ/AMCONSUL MUNICH PRIORITY 1988
RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000168
STATE FOR EUR/AGS(SCHROEDER), EEB/IFD/OMA, AND DRL/ILCSR
LABOR FOR ILAB(BRUMFIELD)
TREASURY FOR ICN(KOHLER) AND OASIA
SIPDIS
E.O. 12958: DECL: 02/09/2019
TAGS: EFIN PREL PGOV GM
SUBJECT: GERMAN ECONOMICS MINISTER THROWS IN TOWEL
BERLIN 00000168 001.2 OF 002
Classified By: CHARGE D'AFFAIRES JOHN KOENIG. REASONS: 1.4 (B) AND (D).
¶1. (C) SUMMARY. The sudden resignation of Economics Minister
Michael Glos (CSU) on February 7 caught Chancellor Angela
Merkel (CDU) and her party off guard at a time when
addressing Germany's economic downturn is paramount. To
minimize damage, the CSU quickly replaced Glos with its
Secretary General Karl-Theodor zu Guttenberg, a decision
which continues to draw criticism from other parties as well
as from within the CDU due to thirty-seven-year-old,s
minimal background in economic policy. The shuffle reveals
strains between the CDU and CSU, and presents an opportunity
for Merkel's political foes to portray her as lacking control
as the country tries to deal with its worst economic crisis
since World War II. END SUMMARY.
INITIAL CONFUSION OVER RESIGNATION
----------------------------------
¶2. (C) Citing his age and intention to leave the cabinet
after the September 2009 elections, the sixty-four-year-old
Glos submitted his resignation as Minister for Economics and
Technology on February 7. Chairman of the Christian Social
Union (CSU), the Bavarian sister party of Chancellor Merkel's
Christian Democratic Union (CDU), and Bavarian Minister
President Horst Seehofer named Karl-Theodor zu Guttenberg,
37, as his successor. Zu Guttenberg had been CSU Secretary
General for only three months following a major party
reshuffle. Glos explained his departure would allow the CSU
to campaign with a new minister in place, and help restore
trust in the CSU following its poor showing in the Bavarian
regional elections in September 2008. The timing of his
departure -- during the financial and economic crises --
however, was awkward. In addition, Glos submitted his
resignation to Seehofer instead of Merkel, which the media
has portrayed as a snub to the Chancellor. (NOTE: Bavarian
political reactions to be reported in ConGen Munich SEPTEL.)
ENTER THE YOUNG TURK
--------------------
¶3. (SBU) Under pressure to resolve an apparent power vacuum
at a key ministry, Seehofer, who as CSU Party Chairman had
the right to fill the slot, had to find a replacement for
Glos quickly. At a February 9 press conference announcing
the choice of zu Guttenberg, Seehofer said that he chose the
rising CSU star partly in order to have a minister
representing the northern region of Bavaria. He lauded zu
Guttenberg's international contacts and his presumed ability
to promote German exports. Seehofer denied reports that
before accepting the new post, zu Guttenberg had demanded the
high-level position of CSU Bundestag Spokesman and CDU/CSU
Caucus Chief in case the CDU/CSU lost the September
elections. For his part, zu Guttenberg welcomed the
opportunity to take on the economics portfolio. He described
Germany's "social market economy" as the "guiding principle"
of his economic thinking, and underscored the importance of
free trade. Zu Guttenberg also said he would work to lower
taxes for small- and medium-sized companies.
GLOS'S ROUGH RIDE
-----------------
¶4. (C) Glos had always been an awkward fit for the Economics
Ministry job, which he took on in November 2005. Glos did
bring intimate knowledge of federal politics to the job, but
was not an economist and had never shown strong interest in
the Economics Ministry's portfolio. Chancellor Merkel
instinctively turned to her Finance Minister Peer Steinbrueck
(SPD) to coordinate the response to the financial crisis,
sidelining Glos. Glos's inability to overcome CDU and SPD
objectives and get additional tax cuts into the stimulus plan
may have cost the CSU the recent Bavarian elections, to the
dismay of Seehofer and others in the CSU.
¶5. (C) A devastating profile of Glos a few months ago in "Der
Spiegel," whose main points Ministry contacts did not
contadict, portrayed him as weak, out of touch with the
bureaucracy, bored with his job, and looking forward to a
nice sinecure for himself after retirement. In a farewell
BERLIN 00000168 002.2 OF 002
meeting with former Ambassador Timken in late November 2008,
Glos appeared under great strain and confessed to tremendous
frustration over his inability to influence Merkel on tax
cuts as part of the stimulus package.
NO LOVE LOST
------------
¶6. (C) SPD party stalwarts are giddy over perceived turmoil
in the CSU and the perception that Merkel is not in control
of developments. Chancellor-candidate Frank-Walter
Steinmeier (SPD) said the CDU/CSU lacked "orientation" in
their management of the economic crisis and called for "party
order and discipline." A CDU staffer expressed irritation
over Seehofer's handling of the shuffle, but she shed no
tears over Glos's departure. On zu Guttenberg, FDP economics
expert Rainer Bruederle commented to us that "as far as
economics is concerned, it seems to be enough these days for
the CSU to find someone who can read and write."
¶7. (C) The business community has mixed views. An IBM
lobbyist told Econoff that she regarded Glos as the only
"counterweight to Steinbrueck" on economic policymaking in
the Germany government. A contact from the German industry
association (BDI) conceded that Glos was "not the strongest
Minister in the Cabinet," adding that BDI had often wished
for someone in the position who was "more outspoken." On zu
Guttenberg, he conceded the new Minister was well-versed in
foreign policy and transatlantic issues, though young and
inexperienced.
COMMENT
-------
¶8. (C) Glos's resignation caught the CDU/CSU party hierarchy
off-guard at a time when everyone in Berlin and Munich was
concentrating on the Munich Security Conference. This
high-profile resignation opens the door to criticism of
Merkel,s handling of the economic and financial crises, as
well as Seehofer's leadership style. Zu Guttenberg's first
challenge will be to help resolve the debate between the
CDU/CSU and SPD over the stimulus package. His appointment
has been heavily criticized within the CDU, with some calling
him a mere "place holder" until the September elections,
raising questions about Merkel,s ability to steer her party
effectively through a long &super8 election year. If not
addressed, the SPD and the opposition FDP could emerge
strengthened by the affair, which has come at a very
inopportune time for Chancellor Merkel,s CDU and its sister
party, the CSU. END COMMENT.
¶9. (U) This cable was coordinated with ConGens Frankfurt and
Munich.
Koenig