As Europe struggles, Merkel party cheers German strength

Tue Nov 15, 2011 9:19am EST
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By Noah Barkin and Stephen Brown

LEIPZIG, Germany (Reuters) - The debt crisis sweeping southern Europe and lapping France is cause for alarm in Washington and Beijing, but not it seems for the rank and file of German Chancellor Angela Merkel's party.

On the contrary, at a meeting of Merkel's Christian Democrats the mood among delegates ranged from triumphalism over Germany's economic strength to complacency about the crisis and blind faith in Berlin's ability to shield Germany from it.

Merkel warned on the first day of the congress Monday that Europe faced what could be its "toughest hour since World War Two." But her message didn't register with many of those in the hall or with the German media. Much press coverage focused on domestic issues - the minimum wage, childcare and education.

"We're dancing on a volcano," said Oswald Metzger, a CDU delegate from Baden-Wuerttemberg who is deputy leader of the party's small and medium-sized business wing.

"Many of the people walking around here in Leipzig are divorced from the real economy and don't understand the euro crisis nor the risks we face."

Figures published Tuesday showed the German economy grew 0.5 percent pace in the third quarter. Unemployment has fallen to its lowest levels since German reunification in 1990 and the smaller "Mittelstand" firms that form the backbone of Europe's largest economy have strong order backlogs.

Many say they are not yet feeling the crisis that is hammering Greece, Portugal, Italy and Spain.

The sense of invulnerability was fueled by Germany's rebound from the global financial crisis. After suffering its worst annual post-war contraction in 2009, the economy bounced back sharply in 2010 on the back of robust exports and government subsidies that discouraged firing.   Continued...