With the entire country feeling good about itself this month with th World Cup going smoothly and Germans partying with guests from around the world, German Chancellor Angela Merkel's comments last week struck an odd chord. Germany, she said, is an "economic basket case."

Not surprisingly, her spokeman is now busy backpeddling away from the statement, made in a speeches she held at the German Industry Federation and again in parliament. The chancellor, said spokesman Thomas Steg, said she was referring to the country's budget and not to the economy as a whole.

The comments angered Merkel's center-left Social Democrat coalition partners. SPD leaders said Merkel was accusing the previous SPD-led administration of having failed to reform the economy, even though the government before that, led by conservative Helmut Kohl, had done less to modernize the country in its 16 years in power.

Politically, Merkel's comment wasn’t astute because it runs counter to a mood of optimism and confidence sweeping the country during the World Cup. Thomas Fricke, columnist for business daily Financial Times Deutschland, says ordinary Germans happily packing stadiums and city centers to watch matches and celebrate the tournament are disproving predictions of economic doom from politicians and killjoy commentators.

According to Fricke, there's no reason to think, as many commentators are expecting, that the nation will revert to its self-doubt and fear of economic decline once the World Cup party is over on July 9. "The fascinating thing about the first two weeks of the world Cup is that the people have already disproved the prophets who have on a daily basis been predicting new downfalls, crises of confidence and slides to the bottom of global rankings," writes Fricke. Contrary to expectations, there has been little hooliganism to speak of, and people are paying thousands of euros to get into stadiums that a consumer watchdog had labelled as dangerous earlier this year.

For months, the media was obsessed with reports of immigrant schoolkids beating up their teachers and being impossible to integrate into society, and now Turks residents are waving German flags during matches, writes Fricke. "For years Germans have been told how flexible the rest of the globalized world is. And now we see how the Chinese after just a few days can't keep up with the production of flags, which are of low quality anyway -- and that German manufacturers are solidly stepping up production," he writes.

"The wonderful thing is that the people don't seem to be that far off the mark with their sentiment. Basically the fan festivals are only continuing a trend that has been registered for months in business and consumer sentiment surveys: ever new record highs." The German economy is booming, which is a danger to the prophets of doom. "When new prophecies of downfall are made each week, it becomes impossible to discern what is really a problem. At some point people stop listening. And they're right not to."

Conservative Die Welt agrees with Merkel, however. "Germany is a basket case. Certainly not in every regard, but because of the sum total of all that has been neglected for so long." The SPD's strong reaction to Merkel's comment is ridiculous and shows how fragile the power-sharing coalition between the two parties is, writes the paper. "The Chancellor should nevertheless stick to her wording."

Conservative Frankfurter Allgemeine Zeitung writes: "A few days ago scarcely anyone would have dreamed that Chancellor Merkel would call Germany a 'basket case' in the middle of the World Cup euphoria." She may have been acting tactically, the newspaper writes. "Her provocation of the SPD is really aimed at her own conservatives. As was to be expected, Social Democrats are attacking the Chancellor -- and that is forcing conservative deputies and regional politicians to get back behind Merkel after they had been restless and dissatisfied in recent weeks."