Merkel`s Govt Failing Germany On Economy-FDP Head

The two parties have a good deal of common ground on financial and energy policy and share power in five German states.

The head of Germany's opposition Free Democrats (FDP) accused Chancellor Angela Merkel's government on Tuesday of poor crisis management and of putting Europe's biggest economy at risk.

Guido Westerwelle, whose party has been the main political beneficiary of the financial crisis, looks likely to be kingmaker after September's election.

He wants to appeal to traditional conservative voters who have been alienated by the compromises Merkel, leader of the Christian Democrats (CDU), has made in her coalition with the Social Democrats (SPD).

"The government is letting itself be driven by the crisis rather than shaping the future," Westerwelle told Reuters in an interview. "It is clear that the economic expertise in (Merkel's) conservative party has vanished," he said.

Germany, already in recession, faces its deepest downturn since World War Two because of the global credit crunch and economic slowdown. Exports are plunging and unemployment is rising.

"The government thinks it is good at crisis management but in truth, the key players in Europe are elsewhere -- (British Prime Minister) Gordon Brown, (French President Nicolas) Sarkozy and across the Atlantic, (U.S.) President Barack Obama," said Westerwelle, 47.

He also said Germany would suffer because of the abrupt resignation of Michael Glos as Economy Minister. He was replaced by 37-year-old Karl-Theodor zu Guttenberg.

"If such confusion over economic policy prevails at a time of economic crisis -- over personnel matters as well as substance -- that reflects badly on a government."

"And how can an economy minister push through anything for Germany in a European context when he first has to get to know his colleagues?" asked Westerwelle.

RISING FORTUNES

The FDP was the biggest winner in a poll in the state of Hesse last month and has been inching up in opinion polls over the last few months. An Infratest dimap survey last week gave the party 16 percent, a record high in that poll's history.

With the conservative camp down three points on 34 percent that result, if repeated in an election, would be just enough to form a conservative-FDP coalition which both Westerwelle and Merkel say they prefer, despite their differences.

The two parties have a good deal of common ground on financial and energy policy and share power in five German states, containing about two thirds of the population.

The FDP, which has shared power with conservatives and the SPD and supplied three German foreign ministers since World War Two, is winning mainly at the expense of the CDU, say analysts.

"The middle classes are suffering and the government is no longer paying them any attention, only the FDP is taking any notice of them and that is why we're growing," said Westerwelle.

Among government policies which have angered some conservatives are the introduction of a minimum wage in some sectors and sticking to the phasing out of nuclear plants.

After failing to reach his target of 18 percent a few election campaigns ago, Westerwelle is modest in his goals for September, saying only he wants 10 percent or more.

"Last time we got almost 10 percent. This time we want double digits and we want to form a government with the conservatives," said Westerwelle.

The FDP campaign will focus on calls for a lower, fairer and simpler tax system, an education system that creates more opportunities and greater respect for civil rights.

Westerwelle rules out nothing but says he has little appetite for an alliance with the SPD or Greens. "The SPD want to raise taxes and the Greens have an irrational energy and environmental policy," he said.