Germany: Merkel's Challenges for the Coming Year

Despite criticism from abroad, German Chancellor Angela Merkel enjoys high approval rates domestically. Merkel's government has benefited from the fact that Germany's economy has been largely unaffected by the European crisis.

But until parliamentary elections in late 2013, Merkel has two main challenges. First, she must ensure that the European crisis does not spin out of control. This means Berlin will support further aid to struggling eurozone countries while pushing for more centralized fiscal control in Brussels. Pressure from France, Spain and Italy to take more drastic measures will increase, and traditional allies such as the Netherlands and Finland will show some resistance to Merkel's strategy, which calls for further delegation of power to Brussels.

Second, Merkel must maintain her popular and political support domestically. For Merkel, keeping her own party and coalition in check will be as challenging as fighting the opposition, especially if Germany's economy weakens.