The recent pressure on Angela Merkel to enact further stimulus measures for Germany’s economy continues, the WSJ reports:

    German Chancellor Angela Merkel is facing mounting pressure to boost her stimulus plans for Europe’s largest economy and reverse a thrifty strategy that has her out of step with other nations.

    She will likely be challenged on the point when European Union leaders gather for a summit Thursday.  On Monday, UK Prime Minister Gordon Brown and French President Nicolas Sarkozy met to discuss policies to revive the European economy – without inviting the German chancellor.  Both men have announced ambitious fiscal, regulatory and other initiatives in response to the financial crisis, while Ms. Merkel’s fiscal boost for Germany’s €2.5 ($3.2) trillion economy includes only €4 ($5.2) billion of fresh money next year.

    All sides played down talk of a rift with Berlin, but in Germany Ms. Merkel’s absence was seen as a symptom of her foot-dragging role in Europe’s economic deliberations.  Meanwhile on Tuesday, Germany’s constitutional court reinstated tax breaks for commuters that Ms. Merkel’s government cut in 2007 – forcing her to put a brave face on the legal defeat, calling it a boost to the economy although she has rejected major tax cuts as a stimulus.

The recession in Germany has turned into a major threat to Merkel’s political future.  Analysts suggest Merkel’s insistence on fiscal discipline will cost her popularity as the effects of the economic downturn set in.