Merkel’s isolation among G-8 on economic policy reflects sentiment in Germany

German Chancellor Angela Merkel is walking an increasingly tricky tightrope to connect German domestic priorities and international ones.

BERLIN — The world leaders who urged German Chancellor Angela Merkel this past weekend to back down from her unforgiving approach to Europe’s economic problems have something in common: They don’t answer to German voters.

Amid increasingly raucous pushback on German-advocated austerity, Merkel appeared isolated at Camp David discussions about Europe’s rising unemployment and continued economic pain. But she is being faithful to public sentiment in Germany, where unemployment is at its lowest in decades and her hard-line policies remain popular amid belief that excessive European debt triggered the crisis.

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In particular, more Germans than ever are ready to say goodbye to Greece as a common partner in the euro currency. A Greek departure would exacerbate the troubles of other vulnerable countries and create head winds for the slow U.S. recovery, an anxious prospect for President Obama in this election year.

Merkel is walking an increasingly tricky tightrope to connect German domestic priorities and international ones. Though she has been making quiet concessions to leaders who favor stimulus over cuts, she has opposed grander proposals to prop up struggling countries, measures that will be under discussion Wednesday at an emergency meeting of the euro zone’s leaders.

The biggest proposal — for euro bonds, which would allow countries that use the euro to borrow money with the backing of all 17 member countries — has been pushed by French President Francois Hollande as a major step toward bringing investor confidence back to countries such as Spain and Italy. On Monday, Merkel’s allies dismissed it.

Euro bonds would be “a prescription at the wrong time with the wrong side effects,” deputy finance minister Steffen Kampeter told Deutschlandfunk radio.

France has advanced a very different message.

“Europe needs to send signals to increase investment and growth in Greece while the country experiences a severe recession,” French Finance Minister Pierre Moscovici told reporters in Berlin on Monday after meeting with his German counterpart, Wolfgang Schaeuble.

On smaller issues, however, Germany’s approach has been friendlier to its neighbors. Berlin has taken action in recent weeks to ease the burden on recession-troubled European countries in ways that fly under the radar of the German electorate, which has been dealing losses to Merkel’s Christian Democratic Union in recent state elections.

One major boost came hours after Merkel and Obama shared an uncomfortable embrace at Camp David. Germany’s largest trade union and an employers group announced Saturday that they had reached an agreement to give a 4.3 percent pay raise to Germany’s 3.6 million metal workers.

The step, taken by the private sector but quietly embraced by German policymakers, sets the stage for more pay increases across Europe’s largest economy. And it marks a major departure after a decade in which German wages have remained flat, making ordinary Germans fearful of inflation and unwilling to spend money that could give a boost to other countries.

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