German squabbles over debt crisis raises fears of early election

A new poll underlined the government’s woes, showing support for the main opposition party at its highest in three-and-a-half years and dismal ratings for Ms Merkel’s junior coalition partner, the Free Democratic Party.

Chancellor Ms Merkel’s coalition, which took power in 2009, has become notorious for infighting, particularly over the Free Democrats’ demands for tax cuts, which has helped push down the party’s support.

The coalition has also performed badly in several state elections this year and the Free Democrats are struggling to avoid being ejected from a fifth regional legislature in Berlin this weekend.

That appears to have prompted a new outbreak of hardline rhetoric on the European debt crisis by the pro-business Free Democrats.

This week, the Free Democrats leader, vice chancellor Philipp Roesler, talked openly about the possibility of an “orderly insolvency” for Greece. The comments unsettled already jittery markets and prompted a clearly-annoyed Ms Merkel to dismiss the idea and demand that “everyone should weigh their words very carefully”.

But the vice chancellor hit back, saying there could be “no bans on thinking”.

Germany’s next national election is not due until 2013, but the ferocity of the clash prompted new media and opposition speculation that a vote might come earlier.

Mr Roesler drew sharp criticism from the opposition, which has advocated introducing eurobonds, bonds jointly backed by all the eurozone’s 17 nations. The Free Democrats are portraying their party as a bulwark against eurobonds, which Ms Merkel also opposes, but which some commentators have suggested as one way to resolve Greece’s borrowing problems.

“The chancellor must now make clear who is in charge,” Cem Ozdemir, a leader of the opposition Greens, said.

“Ms Merkel must now say whether she thinks she can govern in a stable and reliable way with this government until 2013. If not, then she should end it sooner rather than later and give voters a chance to decide who governs this country.”

“(Mr Roesler) pushed down share prices, he further isolated Germany in Europe, and for just one reason – to secure the survival of the FDP,” Carsten Schneider, a prominent Social Democrat said.

“That is irresponsible and completely unprofessional. If he were an employee in a company, he would have to be fired.”