German opposition regroups after split in ranks

BERLIN (Reuters) -- Leaders of Germany's conservative opposition declared they had put an embarrassing split in their ranks behind them after crisis talks Monday.

Referring to the bitter public recriminations among conservatives over the past week or so as a "cleansing storm," new party leader Angela Merkel told reporters: "Now I'm looking to the future with confidence...We've learned our lessons from this defeat."

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Questions over Merkel's authority arose when conservative regional leaders broke ranks 10 days ago and handed Chancellor Gerhard Schroeder's center-left government a surprise parliamentary victory on tax reform.

Most members of the Christian Democrats' national executive were tight-lipped after the four-hour special session but Merkel described the atmosphere as "frank and friendly."

"We were unanimous in agreeing that Schroeder is beatable and we're in fighting mood," she said in answer to questions on a new dip in the CDU's poll ratings after the debacle.

But Merkel, 46, elevated to the leadership just three months ago as the CDU battled to overcome the fallout from the financial scandal surrounding former chancellor Helmut Kohl, faces a tough struggle to silence her critics.

Writing before the meeting, the conservative Frankfurter Allgemeine newspaper delivered a damning verdict: "It will be a surprise if CDU leader Merkel unites and satisfies the party even far enough for it not to inflict further damage on itself. For the rifts that are emerging are not just superficial."

Defeat in the upper house of parliament on July 14 -- when three conservative regional leaders broke ranks and backed the government's tax bill -- showed how far the Christian Democrats were struggling to adapt to the role of opposition after 16 years in power under Kohl which ended in 1998, the paper said.

In two years, Schroeder has outmaneuvered the left wing of his own Social Democrats and consolidated the SPD's hold on the political center while the CDU, undermined by the Kohl scandal, gropes for high-profile issues on which to take a lead.

Much of Schroeder's fiscal reform, aimed at cutting the tax burden to restore growth and enterprise after years of drift and relative stagnation in Europe's biggest economy, was broadly similar to policies endorsed by his conservative predecessors.

"The new CDU leadership has a problem of authority. Leadership in a major party means giving it direction and holding it together," the Frankfurter Allgemeine said. "Ms Merkel...has not managed to do that."

Merkel declined to be drawn Monday into a mounting debate within the party over whether Kohl, architect of the 1990 reunification with communist East Germany, should be allowed to speak at a ceremony marking its 10th anniversary on October 3.

Latest polls give the Social Democrats a 10-point lead at the mid-point of this parliament. The next election is in 2002.

Asked about the next major legislative initiative expected from the government in the autumn -- reforms aimed at cutting the costs of the state pension system -- Merkel said she was prepared to work out a consensus with Schroeder but that much would depend on concrete proposals from ministers.

Similarly, she did not rule out endorsing the tax reforms as they now stand when an amended bill returns to parliament for final approval after the summer recess.

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