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UNCLAS SECTION 01 OF 02 MUNICH 000025 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV PREL INRB GM
SUBJECT: YOUTHFUL POLITICIANS SHAKE UP GERMAN STATUS QUO 
 
SENSITIVE BUT UNCLASSIFIED. 
 
REFS: A) BERLIN 169 B) 08 MUNICH 355 and previous 
 
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SUMMARY 
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¶1.  (SBU) Karl-Theodor zu Guttenberg (37) is Germany's new and 
youngest-ever Economics Minister, assuming a portfolio for which he 
is not wholly suited academically (REF A) but which he could master 
using his proven personal and political skills. If he is successful, 
he could become the poster child for renewal of Horst Seehofer's 
Christian Social Union (CSU), now struggling to convince voters that 
it is modern and savvy enough to succeed and not the hide-bound 
regional redoubt of conservatism that lost big in Bavaria last fall 
(REF B).  (Biographical data at paragraph 8.)    End Summary. 
 
¶2.  (SBU) Supporters and detractors focus on the same qualities in 
the precocious zu Guttenberg: his youth, charisma, foreign policy 
experience, and upward momentum.  Supporters say he will be 
effective because he understands modern challenges, is well known on 
both sides of the Atlantic, and is effective.  Detractors say he has 
too little experience in general and that his foreign policy 
expertise is wrong for the Economics Ministry during an economic 
crisis. 
 
¶3.  (SBU) Zu Guttenberg has a proven record of beating the 
expectations of politicians and the public.  He unexpectedly 
contested and won the Chairmanship of the CSU in Upper Franconia, a 
region of Bavaria, in 2007. After becoming party general secretary 
just three months ago, he used warmth, charisma and direct 
engagement to win over party members in the provinces who were 
skeptical of his allegedly cool and aristocratic bearing (see bio 
notes below at paragraph 8). 
 
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Politicians Curious; Private Sector Upbeat 
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¶4.   (SBU) Zu Guttenberg could add some gloss to the cabinet by 
concentrating in a high-profile way on the business side of the 
economy, leaving high finance to Peer Steinbrueck (Social Democratic 
Party, SPD).  This might be a good strategy.  Senior contacts at the 
Bavarian Economics Ministry told the Consulate political specialist 
that "they are enthusiastic about zu Guttenberg."  Although he would 
not really have time to master the difficult ministry within the six 
months he has before the Federal Bundestag election, they believed 
zu Guttenberg was "smart, with a quick mind, and that he would 
definitely make himself far more visible than Glos ever did." 
Embassy contacts in Berlin have echoed these sentiments and think zu 
Guttenberg is well-suited to capitalize on opportunities with the 
new US Administration.  He seems to get on well with Chancellor 
Merkel.  Moreover, business representatives and the private sector 
have given the new man an early round of applause.  For example, 
Employers' Association President Dieter Hundt said zu Guttenberg's 
international experience, political clout, and contacts would all 
help him promote the interests of employers.  Representatives from 
Industry and Chambers of Commerce expressed the expectation that zu 
Guttenberg would support medium-sized business and strengthen 
transatlantic economic ties, based on his own experience in his 
family's enterprises.  Zu Guttenberg's tasks are manifold: 
Implementation of the savings package worth 100 billion Euros; 
negotiate with companies that have asked for state money, such as 
Continental and car manufacturer Opel; find a solution for Hypo Real 
Estate bank; and tackle a wealth of questions with regard to energy 
and ecology. Chancellor Merkel will want zu Guttenberg to strike a 
balance between being seen as a hands-on minister and preventing the 
election campaign from being fought over the financial crisis, 
something that could weaken Government prospects. 
 
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THE NEW CSU - MORE ATTRACTIVE TO VOTERS? 
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¶5. (SBU) With this appointment, Bavarian Minister President Horst 
Seehofer, also CSU, extended his radical rejuvenation strategy of 
the party to the federal level.  Michael Glos was the last senior 
CSU politician from the preceding Edmund Stoiber generation.  "zu 
Guttenberg is young, very young - but that is exactly what I want in 
the process of renewal," said Seehofer.  The CSU faces potentially 
existential challenges in the races for the German Federal and 
European Parliaments and Seehofer obviously believes that only fresh 
faces can lead the party into a brighter future.  After taking 
office as Bavarian Minister President last fall, Seehofer replaced 
all members of the cabinet over 60 years of age with considerably 
 
MUNICH 00000025  002 OF 002 
 
 
younger people, including more women.  Seehofer's departure as 
Federal Agriculture Minister enabled him to install 44-year old Ilse 
Aigner as his successor. With zu Guttenberg gone to Berlin, Seehofer 
has appointed two from the younger CSU generation to replace him - 
Alexander Dobrindt, a relative unknown 38-year-old Bundestag deputy, 
and Dorothee Baer, the 30-year-old who was just recently promoted to 
foreign policy spokesperson of the CSU Bundestag caucus.  Seehofer 
knows that the June 7 European Parliament elections and the 
September 27 national elections are the tests to see whether 
Bavarians go along with his new CSU. 
 
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Comment 
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¶7.  (SBU) The SPD may hope to profit from the replacement of Michael 
Glos with the relatively inexperienced zu Guttenberg; this may prove 
difficult.  Glos was from the start considered one of Merkel's 
weakest ministers, and his departure removes a favorite target of 
his political opponents.  It will be far more difficult to score 
points by attacking his successor, who is a skilled debater.  In the 
middle of a serious economic and financial crisis, zu Guttenberg's 
challenge will be to convince the electorate in Germany that the 
CDU/CSU remains the party best able to cope with economic 
challenges.  It may not hurt that the new CSU Secretary General, 
Alexander Dobrindt, has previously served as economic spokesman of 
the CSU caucus.  The economy will no doubt be the overriding issue 
in the unfolding election campaign. 
 
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Biographical Data: Germany's Youngest Minister, a Baron 
--------------------------------------------- ---------- 
 
¶8.  The 37-year-old Karl-Theodor von und zu Guttenberg was CSU 
Secretary General for only 100 days.  His nomination to Federal 
Economics Minister had not been on his agenda; however, he said, it 
was "an honor he could not reject." zu Guttenberg, descendent of a 
nobility line dating back to the year 1149, comes from a family with 
a strong political background: His grandfather was a Parliamentarian 
State Secretary under Chancellor Konrad Adenauer, his father is a 
famous conductor, and his grand-uncle supported NS resistance 
fighter Count von Stauffenberg and was executed by the Nazis.  His 
father left the CSU when then-Minister President Streibl cancelled 
his participation in a demonstration against anti-Semitism (he later 
rejoined the party).  Zu Guttenberg is a man of considerable 
rhetorical skills, which in 2007 resulted in his election to CSU 
district chairman of Upper Franconia over his rival, party whip 
Hartmut Koschyk.  Ever since he became a member of the Bundestag in 
2002, he has proven a quick study, making himself a name as foreign 
and security policy expert.  He draws from a rich network of 
international contacts, in Europe as well as in the U.S.  Right 
before the February 6-8 Munich Security Conference, he chaired a 
roundtable on foreign policy issues, attended, among others, by 
Special Representative Richard Holbrooke, Deputy Secretary James 
Steinberg, and USNATO Ambassador Kurt Volker.  He is not without an 
economic background.  For a few years, he worked as investment 
banker in New York; until 2002, he served as managing director of a 
family business.  He also helped prepare a medium-sized company, 
Rhoen Hospitals, to enter the stock market.  He speaks fluent 
English.  His wife, Stephanie, is also of noble lineage.  They have 
two daughters.  Diplopedia reference: 
http://diplopedia.state.gov/index.php?title= 
Karl_Theodor_Freiherr_zu_Guttenberg 
 
¶9. (U) Consulate General Munich coordinated this report with Embassy 
Berlin.  Track Munich reporting at 
http://www.intelink.sgov.gov/wiki/Portal:Germ any.