Greek bailout could hurt Merkel's party

German Chancellor Angela Merkel

TEXT OF STORY

Steve Chiotakis: In Britain, no party has enough seats in parliament to form a government after voters went to the polls there. That could leave current Prime Minister Gordon Brown -- a member of the Labour Party -- in power at 10 Downing Street if he can make a deal with Liberal Democrats. Now meanwhile, the parliament in Greece has voted on drastic cuts to bring that nation's debt under control. Pay and retirement cuts and a big sales tax, part of that plan, and the protests are still going on. And there's a vote in Germany today on approving their part of a $140 billion Greek bailout package. The Germans are contributing a lion's share of that rescue. But the timing is bad for Chancellor Angela Merkel. There's an important state election this weekend and her party could pay a big price for Greece's financial woes. From Berlin, reporter Kyle James reports.


Kyle James: Angela Merkel had a tough job this week trying to sell the Germans on the necessity of the Greek rescue plan. It's about nothing less than very future of Europe, and the future of Germany in Europe," she said in a speech to parliament.

But the majority of Germans oppose the bailout. And Merkel's party could suffer in Sunday's vote in North Rhine Westphalia, Germany's most populous state. Gaby Schulten is a voter there:

Gaby Schulten (voice of interpreter): When some other E.U. country gets in trouble, the government has money to help. But when our own towns need money, they say there isn't any. Something's not right.

To avoid a public backlash, Merkel had tried to delay the Greek bailout until after these elections. But political scientist Gero Neugebauer says that hurt her reputation. Now voters see her as a big spender or indecisive, or both.

Gero Neugebauer: They are puzzled, irritated and they are longing for political leadership.

If Merkel's party loses this weekend, she also loses control of the upper house of parliament. That could make governing, and her plans to reform Germany's tax and health systems, a lot harder.

In Berlin, I'm Kyle James for Marketplace.

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