German politics - The Economist

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ANGELA MERKEL, the German chancellor, owes her seat in the Bundestag to voters in her constituency in Mecklenburg-West Pomerania. That did her no good when the eastern state held an election on September 4th. Her Christian Democratic Union (CDU) got its worst-ever result there. The Free Democratic Party (FDP), her coalition partner in Berlin, was ejected from the state’s legislature. But on September 7th the chancellor heard better news: Germany’s highest court ruled that earlier measures to rescue the euro do not violate the constitution.

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The two verdicts are related. Mrs Merkel’s coalition is slumping in part because voters dislike giant German-backed rescues of shaky euro members. The government wants to boost German guarantees for the European Financial Stability Facility (EFSF), the main bail-out fund, to €211 billion ($295 billion) from €123 billion, and to expand its powers.

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This adds to the queasiness felt by Mrs Merkel’s allies. On September 5th some 25 parliamentarians from coalition ranks abstained or voted against the EFSF expansion in a non-binding preliminary vote, casting doubt on whether the government’s 19-seat majority would hold up in a real vote later this month. Some are speculating that the demoralised FDP will pull out of the coalition, presenting itself in a new election as the taxpayers’ champion in a battle against ever-larger bail-outs.

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German politics - The Economist

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