Foreign policy rifts could grow in Germany

BERLIN (Reuters) - Foreign policy rifts between Chancellor Angela Merkel and her foreign minister are likely to deepen if they face each other in an election next year, potentially complicating Germany's ties with top partners.

A trip by Foreign Minister Frank-Walter Steinmeier to Russia last week and a debate over a visit by the Dalai Lama to Berlin have highlighted a conflict over the extent to which Germany should confront Russia and China over democracy.

With Social Democrat (SPD) Steinmeier a leading candidate to challenge conservative Merkel when Germany elects a new parliament next year, political analysts say the cracks risk widening and turning into a central theme of the 2009 campaign.

They say open divisions on foreign policy, when new presidents are taking power in Moscow and Washington and a bolder China is flexing its economic muscles, could hurt Germany's image and its foreign business prospects.

"We need a marriage of reason (between Merkel and Steinmeier). We can't afford divisions," said Helfried Rietz, managing director of container terminal group Eurogate and part of a business delegation that accompanied Steinmeier in Russia.

"Germany is so important to Russia as a trading partner that we cannot afford not to speak with a united voice."

Germany is by far Russia's biggest single trading partner, with a record $52.8 billion in bilateral trade in 2007.

PRAGMATIST VS IDEALIST?

Merkel, who grew up in East Germany, has taken a tough stance towards Moscow over free speech and openly scolded Russia's former president, Vladimir Putin, at a summit last year for stopping opposition figures taking part in a rally.

"I don't think the controversies will disappear at once," she said after meeting new President Dmitry Medvedev in March.

Last September, Merkel became the first chancellor to receive the Dalai Lama, a move that infuriated China, which brands Tibet's exiled spiritual leader as a separatist.

Steinmeier criticized Merkel for that meeting and refused to meet the Dalai Lama during a trip to Germany in the past few days, sparking a sharp response from allies of Merkel.

On his Russia trip, Steinmeier met opposition leaders and defended pluralism in a speech to students. But he refrained from any direct criticism of Russia and instead praised Medvedev's promise to modernize Russia.

"I offered the new president a modernization partnership," Steinmeier, who studied law in West Germany, said after meeting Medvedev.

Medvedev visits Germany later this month on his first trip to the West as president.

Steinmeier and Medvedev have a long shared history from the years when they both managed the offices of their respective heads of state -- Medvedev for Putin, and Steinmeier as chief of staff of former German Chancellor Gerhard Schroeder.

Steinmeier's allies say his reasoning on Russia is grounded in the tradition of the Ostpolitik of former Chancellor Willy Brandt, who from the 1960s focused on patient negotiations to improve relations with states behind the iron curtain.

"The SPD is conducting Realpolitik while Merkel is focusing on idealistic values," said Gerd Langguth, a political scientist at Bonn University.

"LESS UNITED"

Steinmeier has not said he will run for chancellor but is widely expected to do so if unpopular SPD chief Kurt Beck bows to pressure from within his party and steps aside.

It is questionable whether his pragmatic stance on Russia and China, and more critical approach towards the United States, would prove a hit with voters. Most Germans supported Merkel's decision to meet the Dalai Lama last year and many were critical of Schroeder's business-first approach to foreign policy.

But a Merkel-Steinmeier showdown next year would offer voters a clear choice on foreign policy at a time when far fewer domestic issues differentiate their two parties.

"If Steinmeier was to become the SPD candidate, you could expect German foreign policy to appear even less united than is the case at the moment," said political scientist Klaus Segbers from Berlin's Free University.

He said significant differences in Merkel's and Steinmeier's stances would pose a problem for German foreign policy on both European and transatlantic issues.

"It could have serious implications in that partners would find it hard to identify the common German foreign policy stance," Segbers said.

(Editing by Timothy Heritage)