One can’t really say there has been a shortage of good news in the first 12 months that Chancellor Angela Merkel has been at the helm in Berlin. So why is her government so unpopular with Germans?

Lets cover the good news first: The unemployment rate has fallen below 10 percent for the first time in four years. The German budget deficit is no longer horrendous -- and even conforms to the European Union mandated limits for the first time in years -- due to an unexpected tax revenue windfall to the tune of over €20 billion. Economic growth is forecast to be 2.3 percent this year compared with a paltry 0.9 percent in 2005.

To top it off, Merkel has spent the year waltzing inexorably toward the center of the international stage. People the world over -- largely because of the chancellor and, of course, because of this summer's World Cup -- like Germany again. What's to complain about?

A lot, according to a number of recent surveys taken as Merkel's grand coalition government -- a marriage of convenience between her conservatives and the center-left Social Democrats -- approaches its first birthday on Nov. 22. Fully 78 percent of Germans think that the "government hasn't been able to solve the country's most pressing problems," a recent Forsa survey found. Only a third of the country's top managers think the country is "on the right track," a survey published Friday in the economic daily Handelsblatt warned. The popularity of Merkel's Christian Democrats is lower than it has been since ex-chancellor Helmut Kohl face-flopped amid a party finance scandal in the mid-1990s. And earlier this month, a survey indicated that over 50 percent of Germans were dissatisfied with the way democracy functions  in their country.

All of which begs the question: Is Merkel really that bad? Or are Germans merely displaying their well-honed penchant for seeing the gloomy, dingy, inky-black side of everything?

Exceedingly high expectations

It could be a little of both -- combined with oddly high expectations placed on Merkel, who only barely defeated Gerhard Schröder on a split vote last autumn. The result, was a so-called "grand coalition," pairing Germany's two largest political parties -- parties with decades of experience fighting opposing one another  in parliament but little experience cooperating.

Nevertheless, it seems that Germans thought –- because the coalition controls 448 of 614 seats in parliament -- they were getting a powerful government that would be able to push through effective reforms at will. Merkel herself called it the "coalition of new possibilities" -- and many wanted to believe her. Her popularity at the beginning of her term was through the roof.

And it’s not like Merkel and her cabinet have done nothing domestically. The retirement age was raised from 65 to 67 in an attempt to prepare Germany’s teetering pension system for the country’s quickly aging society. A major federalism reform redefined the sharing of power between federal and state governments. Family law has been changed to make having children –- if only marginally -- more attractive. And, though widely criticized, the health care system has been revamped. 

But bitter political infighting and highly public bickering have accompanied most of the above. And there has been no sudden, radical breakthrough to inoculate Germany against the uncertainties of globalization and put the country back on the very top of the global economic heap –- a position so many seem to think is the country’s rightful place. Indeed, many of the reforms that have been passed, have been watered down as junior coalition partners the Social Democrats and Merkel's conservatives struggle to find common ground.

So where did the misguided thinking and absurdly high expectations come from? For both the Handelsblatt and the Süddeutsche Zeitung newspapers, the current disgust with all things Berlin comes in part from a deeply rooted German yearning for strong leadership combined with a misconception that democracy can provide such guidance.

“Those who once supported the grand coalition,” wrote the Süddeutsche Zeitung on Saturday, “have become its greatest critics, and for a predictable reason: The grand coalition was, for them, the democratic version of the powerful leader, a kind of Hercules.” A year later, disappointment and frustration have taken over; the constant negotiation, horse-trading and compromise necessary in such a coalition is seen as a sign of weakness –- and maybe even a little dirty.

An overly cautious chancellor

If it is in fact a strong leader that Germans are seeking, then Merkel hasn't disappointed her critics. Whereas her predecessor Schröder, who was often called the “Basta Chancellor” for his tendency to end drawn-out debate with a quick, firm decisions, Merkel prefers a less confrontational style and is slow to castigate fellow Christian Democrats or cabinet members when they veer from the government line. She's cautious to a fault, preferring to read even the briefest of statements from her notes than to risk the possibility of saying the wrong thing.

Such criticism, of course, could easily be dulled by pointing out that in a male-dominated political world, a female leader often has to be twice as strong –- a la Margaret Thatcher -- in order to earn respect. Nevertheless, the domestic policies of Merkel's government lack vision -- and the modest reforms that it has managed to push through don't seem to be part of any larger strategy. Add to that the decision to raise the VAT (sales tax) from 16 to 19 percent, no matter how necessary it may be, and it's not difficult to see why Merkel is making few friends.

Nor is there much appetite amongst the voting population to undertake difficult structural reforms. With 28.5 million Germans currently being supported by the social safety net (be it through the pension system, unemployment insurance or social welfare payments) and only 26 million active taxpayers, as one Christian Democratic party insider recently pointed out to DER SPIEGEL, widespread popularity for any business-friendly reforms is hard to come by.

Popularity abroad

From abroad, of course, Merkel’s leadership looks completely different. She has done much to repair the strained trans-Atlantic relationship with Washington –- a bond that had been frayed by Schröder’s brusque condemnation of the Iraq war. US President George W. Bush has even expressed admiration for Merkel, even though on her first visit to Washington in January, she closely questioned him on human rights issues related to US treatment of terrorism suspects. Closer to home, she has gently reoriented German foreign policy away from Russia  and has hit it off well with France’s Jacques Chirac.

Within the European Union, she is even seen as something of a savior. With the Britain’s Tony Blair and Chirac both likely on their way out, and the Italian government shaky once again, Merkel has emerged as a strong leader dedicated to moving the EU project forward. Right at the beginning of her term, she was instrumental in pushing through an EU budget compromise that threatened to plunge the 25-member club –- following the shelving of its constitution -- even deeper into crisis. She has said she hopes to breathe new life into the EU constitution when she takes over the presidency in January.

Perhaps most importantly, though, she and Foreign Minister Frank-Walter Steinmeier have continued the project started by Schröder and ex-foreign minister Joschka Fischer of establishing Germany as a major foreign policy player. Sending a flotilla to patrol the coast of Lebanon is only the most recent example of Germany taking a greater responsibility when it comes to tamping down the world’s hotspots.

Still, Merkel is for the moment measured more by what she does at home. And Germans are clearly not in the mood to be charitable. Perhaps the current disillusionment is merely temporary. Maybe Germans will realize that the grand coalition is not the powerful political instrument many of them clearly thought it would be and readjust their expectations.