By Thorsten Severin
STUTTGART, Germany (Reuters) - German Chancellor Angela Merkel's embattled coalition ally Guido Westerwelle defended the record of his Free Democrats in a defiant speech on Thursday but did not address calls from within the party for his own resignation.
Germany's foreign minister and vice chancellor told a party conference in Stuttgart that the country needed a strong FDP at a time when the party, often referred to as the "Liberals", has sunk to just 4 percent in opinion polls.
"We Liberals will fight and I will fight," said Westerwelle, who has led the FDP since 2001. "Without the FDP there will be a left-wing majority, but with the FDP we can prevent that."
The 49-year-old led the pro-business FDP to a record performance in the national elections 15 months ago, when the party won 14.6 percent of the vote and became junior partner in Merkel's centre-right coalition.
But it has languished for months below the 5 percent threshold for entering Germany's parliament and Westerwelle has taken much of the blame for the slide after an erratic first year in office which has pushed his approval ratings down to 29 percent.
One party rebel has called him as a "millstone round the neck" of the FDP and many others fear a drubbing in a series of crucial state elections later this year. Some are calling openly for him to relinquish his leadership of the party.
Merkel risks being destabilised by the weakness of the FDP, which has bickered with its coalition partners and struggled to deliver on its main election goal of lower taxes.
While Merkel's Christian Democrats and their Bavarian sister party are steady at a combined 34 percent in the polls, the FDP's decline has put the ruling coalition 17 points behind the three left-leaning opposition parties.
Westerwelle is a powerful orator whose speech was being closely monitored for signs he might succumb to pressure to step aside.
Littering his speech with phrases like "proud to be German", Westerwelle emphasised Germany's strong recovery from the global downturn and the FDP's role, saying: "We Liberals have contributed to our country being in such good shape and health."
"NOTHING NEW"
He earned a standing ovation and one FDP cabinet colleague, Justice Minister Sabine Leutheusser-Schnarrenberger, said Westerwelle had quelled the doubts about his ability to lead.
"I don't think we will have a leadership debate now. It can only hurt the FDP," she said.
But Thomas Oppermann, parliamentary leader of the opposition Social Democrats, called it a "flop" and said: "Westerwelle ignored the debate about himself and his future."
Manfred Guellner, head of pollsters Forsa, was also pessimistic about whether Westerwelle could win back voters that have deserted the FDP in droves over the past year.
"Even if it were a good speech, it's not going to reach voters who have turned their backs on the party. They've lost 80 percent of their voters since September 2009."
Peter Dausend, a columnist for Die Zeit newspaper, told German television there was "nothing new" in the speech.
"No one's any wiser now about what the FDP's going to do than they were before his speech. If I were an FDP voter, I'd be angry," said Dausend. "This speech just wasn't good enough."
The centre-right faces a major political test this year with seven regional elections due, including one in late March in their southwestern stronghold of Baden-Wuerttemberg, a state they have ruled for nearly 60 years but now seem likely to lose.
Merkel can ill afford instability in the coalition and was reported to have urged Westerwelle before the FDP's traditional "Three Kings' Day" meeting to "hang on" in the face of a revolt.
Westerwelle has vowed not to "abandon ship" but appears to have left open the question of whether he will seek re-election as party chairman at the FDP's annual conference in May.
As foreign minister Westerwelle got off to a poor start by refusing to answer a question in English at his first major news conference. He was later criticised for taking his gay partner, a German businessman, on official trips abroad.
Late last year he was embarrassed by Wikileaks' publication of U.S. diplomatic cables that described him as arrogant and vain. One of his aides was revealed as the source of leaks to the U.S. embassy about German coalition negotiations and was forced to leave his post.
(Additional reporting by Erik Kirschbaum; writing by Stephen Brown; Editing by Noah Barkin)
