FRESH snow lay unploughed on German highways yesterday, and patients expecting routine operations were sent home, as the country suffered its worst public sector strikes for 14 years.

After Angela Merkel’s three heady months as Germany’s first female Chancellor, it is a reminder of the huge problems facing her at home. Abroad, she has dazzled, leaving Germans startled and proud. “It is a sea change in handling German foreign policy”, said one Western diplomat.

Tony Blair will visit her on Friday in Berlin, at her invitation. Officials hope for a strong alliance, if one that is kept low-key, to avoid provoking France.

But her unexpected talent for the international limelight may be an enticing refuge from her greatest problems. At home, she must try to get a stroppy coalition of the Right and Left to back crucial economic reforms, in a country terrified of change.

Just months after an election Merkel barely won, over Gerhard Schröder, Chancellor for seven years, she now has the approval of an astounding 80 per cent of Germans. They seem pleased that their unorthodox choice — female, from the East, Protestant, divorced, and childless — has proved a success. “She’s seen off the men in suits”, said one Western official. “It is a central moment in German unification.”

Her transformation began during her unsteady campaign as head of the conservative Christian Democrats. She began as an awkward scientist who blurted out plans for radical economic reform that many found alarming. But she became softer, less hectoring, incomparably more animated.

Success helps, of course. Her great triumph was in brokering the December deal on the European Union budget which Tony Blair seemed unable to clinch. She found the common ground between Britain and France which had seemed non-existent — and wrote a cheque to sooth Poland too.

She stole some of Blair’s glory. New member countries to the east, who had been his allies but felt betrayed at his plan to cut their cash, may now back her more often.

Yet she has taken care not to take sides. In the US, she set out to repair the effects of Schröder’s anti-Americanism — but also challenged President Bush on Guantanamo Bay. In Russia, she told President Putin that she would stay committed to the controversial Baltic gas pipeline which will bypass Poland — but also objected to his repression of Chechnya.

“Her style is very factual, very disciplined, and it has turned out to be very popular”, said one Western diplomat. “People were disillusioned by Schröder’s big gestures.”

Frank-Walter Steinmeier, her Foreign Minister, seems likely to be more helpful to her and lower-profile than the showy Joschka Fischer was to Schröder. He is from her centre-left Social Democrat coalition partners, but has still seemed content to adopt her positions and tone.

“He is loyal, as a personality”, said Volker Perthes, director of the German Institute for International and Security Affairs, (SWP), a think-tank advising ministers on foreign policy.

Perthes thinks that Steinmeier will take on the job of carrying dozens of businessmen with him on trips, freeing Merkel to criticise other leaders without jeopardising commercial interests. Schröder, who loved these huge delegations, thought that criticism “would be bad for business”, said Perthes, adding that “I’m not convinced”.

This tactic of careful balance is one thing. It is still hard to deduce from it what Merkel will make of Germany’s presidency of the European Union and year-long presidency of the G8, which start in January.

Many believe that she may want to keep ratification of the EU constitution on track, despite the French and Dutch “No” votes. She may also face tricky decisions on the status of Montenegro and Kosovo if there is little progress this year.

But those look easy compared with the battle at home. For all Merkel’s tag as the “German Margaret Thatcher”, as Perthes points out drily, “an economic liberal in Germany is not the same as one in Britain”.

Germany desperately needs laws to make it cheaper to fire staff. Merkel, who has been keen to reassure workers that reform would be cushioned by “social protection”, has not sounded like Thatcher. But the anxiety reflected by the strikes may make any change hard.

Germany’s sluggish economy has not yet arrived at a crisis which would make change inescapable. Optimists note that it is still the world’s largest exporter. Pessimists say it is running down investment, outsourcing manufacturing to cheaper countries, and slapping on a “made in Germany” label.

The most hopeful case is that corporate Germany will manage to change where the politicians cannot. Companies are beginning to make large layoffs, paying large sums to do so. “Life itself will ensure reform happens,” said one official. Angela Merkel needs as much of that help as she can get. Her sure-footedness on the world stage could be quickly shaken by failure at home.

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