As Merkel Steps Back Her Party Reels

(Bloomberg) --

Germany’s ruling party begins its annual convention 14 years to the day since Angela Merkel entered the chancellery. But Christian Democratic Union delegates have little to celebrate.

In the dusk of her political career, Merkel has withdrawn from routine domestic affairs, and in her absence, the party has fallen to infighting. While the CDU-led bloc is still the biggest force in Germany, it’s leaching votes to both the far right and the Greens and polling near historic lows.

Righting the ship is the job of Merkel’s chosen successor as CDU leader, the centrist Annegret Kramp-Karrenbauer, but she’s struggling to control the party a year after defeating a conservative candidate for the post. National elections are less than two years off, and the CDU has no clear candidate for chancellor.

CDU members can take little comfort from the fact their traditional Social Democratic rivals — and current coalition partners — are faring worse. The Greens are now the party to watch.

Economically, Germany is in the doldrums, its liberal world view under fire from a belligerent Trump administration and nationalist opponents across Europe.

Merkel, respected and enjoying high domestic approval ratings, has probably secured her legacy. But the future of the party she led for 18 years has seldom been less clear.

Global Headlines

Israel vs Netanyahu | Israel’s longest-serving leader is now its first sitting prime minister to be charged with a crime. In a long-awaited decision, Benjamin Netanyahu has been indicted for bribery, fraud and breach of trust. After two inconclusive elections, the country’s already operating without a fully functioning government, and a third vote in early 2020 is a distinct possibility. Netanyahu says he’s the target of an attempted putsch by law enforcement, and the turmoil is not expected to end any time soon.

Selling radicalism | U.K. voters are on watch for the ruling Conservative Party’s election manifesto after Labour leader Jeremy Corbyn set out a radical proposal to bring railways, water supply and broadband infrastructure into state ownership to fund pay rises for public sector workers, free university tuition and free care for the elderly.

• Click here for a look at the key issue on many voters’ minds.
• And Citigroup’s European head has this message for politicians squabbling over Brexit.

Impeachment snapshot | Donald Trump’s impeachment defense hangs by a thread after two weeks of hearings, as a parade of witnesses described how the U.S. president’s efforts to pressure Ukraine to investigate Democratic rival Joe Biden extended well beyond a July 25 call. And yet one key piece of Trump’s defense is intact: None of the witnesses testified that Trump himself directly ordered them to make a quid pro quo explicit to the Ukrainians.

Breakthrough | Japan and South Korea have made a last-ditch effort to save their expiring intelligence-sharing pact after the Trump administration pressed its two allies to prevent their feud from dealing a lasting blow to the regional security network. Seoul will extend the pact under the condition that Japan lifts its export curbs by the end of this year, Korean media reported.

Oil heartland | Saudi Arabia’s Eastern Province is home to oil giant Aramco, whose share sale has been an obsession of financial markets in recent weeks. The region is also known for unrest among its Shiites, the branch of Islam that dominates Iran. Now Crown Prince Mohammed bin Salman is working to improve relations between the government and the restive region to keep Shiites loyal to Saudi Arabia at a time of heightened tension between the two rivals, Rodney Jefferson and Donna Abu-Nasr report.

What to Watch

• Uruguayans will elect their president Sunday with polls suggesting the center-right National Party is on course to end 15 years of left-wing rule in yet another power shift in Latin America.
• Hong Kong High Court today allowed the city’s government to reinstate its controversial mask ban for seven days while the appeals process takes place after it had ruled the ban “unconstitutional.”
• House Speaker Nancy Pelosi and U.S. Trade Representative Robert Lighthizer were unable to seal a deal yesterday on the stalled U.S.-Mexico-Canada free trade agreement, increasing the likelihood the pact won’t get a vote in Congress this year.
• Trump has signed a four-week spending bill, putting off a possible government shutdown until Dec. 20, setting up a possible Christmas-season showdown.

And finally ... Millions of Hong Kong residents will go to the polls Sunday in council elections, as the normally low-key vote emerges as the public’s first chance to weigh in at the ballot box after months of violent unrest. The election follows chaotic days that paralyzed swaths of the city, though as Enda Curran reports, prominent investors, bankers and businesspeople suggest things will have to get much worse before the city’s moneyed classes give up on it.

--With assistance from Kathleen Hunter, Bruce Douglas, Rodney Jefferson, Amy Teibel and Karen Leigh.

To contact the editor responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Rosalind Mathieson

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