Back From Vacation, Merkel Takes Stock of Government

Germany's political summer break came to an end on Monday and as politicians returned to their Berlin offices, Chancellor Angela Merkel, who enjoyed a breath of fresh mountain air while hiking in the Dolomites before heading to Bayreuth for her annual dose of Richard Wagner's operas, also returned to the daily business of governing with a question-and-answer session with journalists.

As the public's attention remains focused on the Middle East, the shaky peace between Israel and Hezbollah fighters in southern Lebanon, as well as Germany's role in a United Nations peacekeeping force are among the central questions facing Merkel.

Achieving peace in the Middle East

"The ceasefire is very fragile," she told reporters. "At the moment there is too much talk about the military component and not enough about the long-term political process."

Merkel said it was crucial for United Nations peacekeeping troops to enter the region soon to prevent a rekindling of the conflict that has cost some 1,200 people in Lebanon and 157 Israelis their lives.

While Merkel said she could not imagine peacekeeping scenario "in which Europe is not engaged at all on the ground," Germany's decision to limit its commitment to a small naval unit had been met with "strong approval" in the international community out of sensitivity for Israel, where memories of the Holocaust are still raw.

Merkel also called for the Middle East quartet of the United States, Russia, the European Union and the United Nations to take up its work in trying to find a solution to the conflict between Israel and its neighbors.

The recovering German economy

Domestically, Merkel conceded that plans to raise the value-added tax from 16 percent to 19 percent in 2007 were unpopular, but pointed to signs of economic recovery, including accelerating growth and falling unemployment.

"Germany is no longer the sick man of Europe," she said. "I think we have turned the corner."

Data released last week showed that the German economy grew by 0.9 percent in the second quarter, its fastest pace in more than five years.

"I'm thoroughly convinced that we will break out of the circle of spiraling debt in the next few months," she said, adding that Germany is on track to meet EU regulations of limiting new debt to 3 percent of the gross domestic product.

Merkel said she plans to continue the reform process started by her predecessor, Gerhard Schröder -- who she credited with taking steps to cut German unemployment -- by alleviating the tax burden for small and medium-sized businesses and intensifying efforts to scrap bureaucracy.

Germany's fight against terrorism

Germany is also faced with a new task of fighting terrorism at home after two suitcase bombs were discovered on local trains at the end of July, Merkel said.

She called for additional video surveillance in train stations after recordings helped authorities find and arrest one of two men suspected of planting bombs on the trains headed to the western German cities of Dortmund and Koblenz.

"We will of course have to draw the necessary consequences regarding the events in Kiel and the planned attacks on the railway," she said, mentioning the city where the first suspect was arrested. "Certainly no one will claim that the video surveillance is not an important thing."

In light of the failed German rail attacks, Merkel also said Germany needs to expedite the implementation of a database to help identify and track terror suspects in Germany.

Back into the political fray

Since going on vacation, Merkel has had to watch Germans' approval of her slide downward to a record low of about 30 percent.

What seems to rankle most with German voters, pollsters said, is her inability to come up with reforms that are convincing and to forge agreement with her Social Democratic Party (SPD) junior partners without a major debate.

Merkel, however, had words of praise for SPD head Kurt Beck, dismissed claims of too much bickering within the ruling grand coalition and vowed to press ahead with her political course.

"I'm not going to bother with opinion polls," she said. "The political course we've adopted is right, and I'm convinced it will make this government a success. We have been and will remain truthful to the people about what we are going to do and this will pay off in the future."

Günter Grass' belated apology

Merkel even found time during the press conference to criticize Nobel literature laureate Günter Grass for admitting to being a member of the Nazi army's Waffen SS.

"I wish we had been informed of his biography in entirety from the beginning," she said. "I am not surprised at the widespread criticism over the late revelation of this biographical fact because Grass never held back in speaking his mind on other issues."