Germans gloomy on economy, Merkel support firm: poll

BERLIN (Reuters) - More than half of Germans are pessimistic about the economy but support for Chancellor Angela Merkel's conservatives is holding firm, thanks partly to their tough stance on the euro zone, according to an opinion poll published on Wednesday.

The Forsa Institute survey, published in the Stern weekly, also showed Merkel's junior coalition partner, the Free Democrats (FDP), which has said Greece should quit the euro, reaching the five percent threshold needed to enter parliament.

Fifty-seven percent of those polled had a pessimistic view of Germany's economic outlook, while only 12 percent were optimistic - a gap of 45 points which is the widest margin since October 2008 when the global financial crisis hit.

Germany, Europe's largest economy, has weathered the euro zone debt crisis relatively well so far, with exports to non-European markets booming and unemployment touching 20-year lows, even though a rash of recent data have pointed to a slowdown.

But Germans still feel Merkel's conservatives are best placed to steer Germany through the crisis. The poll gave her party 36 percent, unchanged from the last poll and nine points ahead of the main opposition center-left Social Democrats (SPD).

"People have the feeling that she (Merkel) is tackling the problems and is standing up for German interests," said Manfred Guellner, head of the Forsa Institute.

A second poll conducted for ARD TV channel on Wednesday showed 70 percent of Germans are satisfied with Merkel's handling of the euro crisis. But a large majority also think the worst is still to come and three quarters said Germany would suffer badly from a euro breakup.

AUSTERITY

Merkel has insisted that heavily indebted euro zone countries implement tough austerity measures in return for help from Europe's bailout funds, a stance that has made her very unpopular in countries such as Greece.

She has also resisted calls from France and other partners for euro bonds, or mutualised debt, saying this would remove pressure on indebted countries to reform their economies.

Merkel and her allies are also opposed to granting the new bailout fund, the European Stability Mechanism (ESM), a banking license that would allow it to tap unlimited resources via the European Central Bank.

"A measure like a banking license makes us increasingly liable for undesirable developments in other countries. Ultimately it's the German worker who, with the pennies he has saved up, becomes liable for such undesirable developments," Rainer Bruederle, a senior member of the FDP.

"Germany's national finances are not a self-service shop for countries that are not prepared to make the changes they should have made a long time ago."

In the Forsa poll, the pro-business FDP had 5 percent, up one percentage point from last week. This would be just enough to get back into parliament in next year's federal election. The Greens, the SPD's preferred coalition partner, had 12 percent.

The FDP has hardened its stance on the euro zone crisis and its leader Philipp Roesler has said an exit for Greece - which is still falling far short of its fiscal targets despite two bailout programs - was no longer a taboo.

On the poll's projections, Merkel would be unable to form a new government with the FDP and would most likely have to forge a 'grand coalition' with the SPD, as she did in 2005-09.

In the poll, conducted on July 23-27 among 2,501 people, 56 percent agreed that Greece should leave the euro zone while 35 percent said it should stay.

(Reporting by Gareth Jones; Editing by Jon Boyle)

Source: http://news.yahoo.com/germans-gloomy-economy-merkel-support-firm-poll-153705180--business.html

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