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The leading challenger for Germany's Chancellor, Peer Steinbrück, says that he would suspend US-EU trade talks until the US comes clean on spying on Germany. While current Chancellor Angela Merkel is believed to have a strong lead, the spying scandal has become the one election issue that stirs the public in what has been an apathetic season.

It would seem that German Chancellor Angela Merkel is tipped to easily win re-election in a little under a month.

Rainer Buergin, Bloomberg:

German economic figures show the uphill struggle Peer Steinbrueck faces to unseat Chancellor Angela Merkel in Sept. 22 elections.

Since Merkel succeeded Gerhard Schroeder in 2005, unemployment has dropped to near a post-reunification low, the budget deficit has been virtually eliminated and workers have more money in their pockets. Investors are accepting negative real returns to lend money to the federal government.
...

All that is serving Merkel’s bid for a third term. Her Christian Democratic Union bloc leads Steinbrueck’s Social Democrats by about 17 points in the polls.

But this could be an deceptive. The electorate has not engaged in the election.

Kristen Allen, Spiegel International:

German politicians and newspapers are doing their utmost to spark voter interest in the country's upcoming federal election, but no amount of scandal-mongering, however legitimate, appears to be enough.
...
Among the issues at hand, NSA surveillance appears to have gained the most attention from voters. The majority find the prospect of their telephone and Internet communications being monitored unsettling....
Certainly that's good news for an incumbent. Voter complacency generally means that voters are satisfied with the way things are. But there's a wild card, and that's the NSA scandal.  Not surprisingly, Merkel's challenger has focused on the issue as one that might shift public opinion.  

Kevin Rawlinson, The Guardian:

In a further sign that the NSA row has soured relations between the US and its European allies, Peer Steinbrück, leader of the Social Democratic party, told ARD TV: "I would interrupt the negotiations until the Americans say if German government offices and European institutions are bugged or wiretapped. We don't know if the Americans may be sitting under our desks with some technical devices." He pledged to press Washington about the spy agency's activities before continuing with the talks about a transatlantic free trade agreement.
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At a recent rally, the chancellor struggled to make herself heard over chants of "hypocrite" and "liar" and the sound of vuvuzelas being blown by opponents worried about stories of American snooping.
I think Merkel will likely be re-elected. With the economy in good shape for now, the opposition does not have much reason to demand change. But a revelation that Merkel knew about the spying and did nothing could shift the campaign. In any event, she's almost certainly going to have to take steps to reduce NSA snooping in Germany, if for no other reason than that German companies don't want to have their secrets compromised.

As I have been saying for some time, the commercial dimensions of the NSA scandal deserve special attention. The US could lose a significant economic advantage if Brand America is damaged.

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