German coalition clash escalates as Merkel marks decade in power

By Noah Barkin BERLIN (Reuters) - The parties in Chancellor Angela Merkel's coalition government exchanged insults at the weekend in an escalating clash over refugee policy that has left the German leader looking more vulnerable than at any time during her decade in power. Divisions between her conservatives and the centre-left Social Democrats (SPD) over benefits for refugees prompted coalition leaders to cancel a special cabinet meeting planned for Monday where they had hoped to agree measures to speed up the processing of asylum seekers. But the biggest fight was within Merkel's own conservative ranks as members of her Christian Democratic Union (CDU) lined up to condemn their Bavarian sister party for humiliating the chancellor at a congress in Munich on Friday evening. With Merkel standing next to him, Horst Seehofer, the leader of the Bavarian Christian Social Union (CSU), openly criticised her for refusing to put a formal cap on the number of refugees entering Germany. He was cheered loudly by members of his party as Merkel stood fidgeting uncomfortably on the stage. Elmar Brok, a senior member of Merkel's CDU, denounced Seehofer's behaviour as "impolite, unseemly and unacceptable" in an interview with the Tagesspiegel newspaper. Other CDU members said the CSU leader had broken a taboo in how the two parties behave with each other. Seehofer refused to back down, telling German television station n-tv that he could not in good conscience tell a "fairy tale of harmony and consensus" when major differences remained. The barbs flew as Merkel marked her 10-year anniversary in office on Sunday. Her popularity ratings have plunged from a gaudy 75 percent in April to below 50 percent and support for her CDU/CSU bloc has dipped five points to 37 percent, still more than ten points ahead of the next strongest party, the SPD. LOOMING ELECTIONS To prevent further damage, her advisers say she must find a way to curb the number of migrants entering Germany, ideally by the spring when three state elections will be held in a major test before the next federal vote in 2017. A party congress of her CDU in early December will be an important gauge of how strong support within her own party is. "There are real Merkel loyalists in the CDU and those that are more tactical," an official close to the chancellor told Reuters on condition of anonymity. "The CDU is not a party that pushes out its leaders. But you will see a shift if people get the sense that Merkel is a burden for them rather than a bonus." Roughly 7,000 migrants have been entering Germany each day in recent weeks, according to police, with the vast majority flowing into Bavaria over the Austrian border. Roughly a million are expected to arrive this year alone. Merkel has rebuffed calls from the CSU and members of her own party to impose a ceiling on the number of refugees Germany will accept, saying this would be impossible to enforce. To reduce the numbers, she is hoping Turkey will agree to keep more refugees in exchange for financial support from the European Union. She is also pressing for so-called "hotspots" to be set up at Europe's external borders, and for faster processing of migrants at home, so that those who are not granted asylum can be expelled more rapidly. But SPD resistance to her domestic plans and opposition in Europe, particularly eastern countries, to accepting refugee quotas are sowing doubts about whether her strategy can succeed. "Up until a few months ago, most Germans saw Merkel as a rational, reliable and risk-averse defender of a very comfortable German status quo," the Frankfurter Allgemeine Zeitung said in a weekend editorial. "Nowadays, even in her own party, one hears the refrain: we don't recognise her anymore." (Writing by Noah Barkin; editing by Giles Elgood)