German Chancellor Angela Merkel is being buffeted by domesticpolitical turbulence, threatening to distract her efforts to followthrough on a European summit agreement last week to tackle the eurodebt crisis.

Christian Lindner, the general secretary of Merkel's FreeDemocratic coalition partner, unexpectedly quit yesterday amid aparty tussle over bailouts. Separately, Merkel's spokesman said thechancellor had full confidence in Christian Wulff, Germany'spresident, after a Bild report that he misled lawmakers over a500,000 euro ($650,000) home loan.

The political turmoil engulfed Merkel's administration five daysafter she secured what she called a “breakthrough” European deal toenforce stricter budget rules and to stem the financial contagionnow in its third year. That uncertainty may disrupt her efforts torestore market confidence by pushing the steps agreed on inBrussels through parliament in Berlin.