Next Question for Merkel: Will the Latest Coalition Truce Hold?

(Bloomberg) -- German Chancellor Angela Merkel eked out a truce in her coalition, patching up for now a clash over her domestic intelligence chief that pushed her government to the brink for the second time in three months.

With poll numbers for the governing parties at historic lows and the anti-immigration Alternative for Germany party gaining further support, Merkel was under pressure to halt the rot in a case that’s emblematic of the political fallout from Germany’s refugee crisis in 2015.

Coalition leaders needed two crisis meetings in less than a week to shuffle away Hans-Georg Maassen, head of a federal agency that tracks extremist threats, who defied Merkel by questioning whether a video from a far-right protest in August was authentic. While the gridlock may be over for now, the cast of characters hasn’t changed.

“This is another technical compromise,” said Carsten Nickel, an analyst for Teneo Intelligence in London. “But the structural problems are still in play.”

All sides are pledging to end the distractions and get back to governing Europe’s biggest economy. Also Sunday, Merkel met German auto executives at the chancellery to find ways to avoid diesel-car driving bans in cities. She’ll speak at a town-hall event on Europe’s future on Monday afternoon.

Merkel’s Future

After almost 13 years in office that make her Europe’s longest-serving leader, Merkel, 64, found herself hemmed in for weeks by infighting between her Social Democratic coalition partner and Interior Minister Horst Seehofer. He also heads the CSU, her regional sister party in Bavaria.

An initial deal over Maassen’s fate fell apart after the SPD objected to his being awarded a different job with a higher pay grade. That skirmish prompted a warning by Merkel’s party secretary-general that the coalition’s survival was at risk -- and derision and calls for an early election by opposition parties.

Seehofer, who paved the way for Sunday’s compromise by giving up on the intelligence chief’s pay raise, said ending Merkel’s six-month-old government wasn’t on the table.

“At least wherever I was present, there was at no time any debate or threat about breaking up the coalition,” Seehofer told reporters in Berlin.

Bavaria Factor

Once prized for embodying political stability, the “grand coalition” of Merkel’s Christian Democratic-led bloc and the SPD has become a showcase for the erosion of Germany’s political center. Seehofer, ostensibly Merkel’s ally, brought the coalition to the brink this summer by threatening to unilaterally tighten border security over Merkel’s head.

“The government has many things it still wants to get done,” Finance Minister Olaf Scholz, a Social Democrat, said on ZDF television Sunday evening. “It’s about doing good work on the issues and that’s what we should concentrate on in the weeks ahead.”

The latest conflict was stoked by next month’s election in Bavaria, a state the CSU has governed virtually on its own since World War II. Polls suggest the party will lose its legislative majority in the Oct. 14 ballot and support for anti-immigration Alternative for Germany, or AfD, will surge.

Nationally, support for the Merkel’s bloc fell to 28 percent in an Infratest Dimap poll for broadcaster ARD, the lowest level since the poll’s inception in 1997 and almost 5 percentage points less than its tally in the 2017 election. Alternative for Germany, or AfD, rose 2 points to a record of 18 percent, according to the Sept. 17-19 poll of 1,035 people.

--With assistance from Birgit Jennen.

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net;Arne Delfs in Berlin at adelfs@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Tony Czuczka, Ros Krasny

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