Merkel wins approval for coalition from parties

14th November 2005, Comments 0 comments

14 November 2005, BERLIN - Designated German chancellor Angela Merkel received a green light Monday for her government after all three coalition parties approved a marriage of the country's main political blocs.

14 November 2005

BERLIN - Designated German chancellor Angela Merkel received a green light Monday for her government after all three coalition parties approved a marriage of the country's main political blocs.

Merkel's Christian Democratic Union (CDU), the Bavarian Christian Social Union (CSU) and outgoing chancellor Gerhard Schroeder's Social Democrats (SPD) overwhelmingly voted in favour of the coalition pact.

The three parties will on Friday sign the 150-page coalition agreement which is aimed at a four-year government.

Merkel, who is 51, is due to be formally elected by parliament as Germany's first woman chancellor on November 22.

"I know full well the path will not be easy," said Merkel in a speech thanking her party for backing what is likely to be an awkward alliance of her conservatives with the left-leaning SPD.

Seeking to deflect disappointment over the coalition deal - which is widely seen as having a strong SPD content - Merkel told the CDU she would stand firm on policies rejected by Schroeder's party.

"Politics is not the art of what you simply desire ... but rather the art of what is possible," said Merkel at the CDU's Berlin congress, adding: "We would have liked to achieve more."

Outgoing SPD chief Franz Muentefering, who will serve as Merkel's vice-chancellor and labour minister, told SPD leaders in Karlsruhe the coalition accord was neither "a radical free market programme" nor a "purebred SPD programme".

"But street mongrels are sometimes better able to accomplish things," said Muentefering who is known for his earthy language.

The coalition agreement has drawn criticism for plans to raise Germany's value added tax (VAT) to 19 per cent from the present 16 per cent beginning in 2007.

It will also increase the highest level of income tax to 45 per cent from the present 42 per cent level.

These moves, coupled with spending and tax subsidy cuts worth over 30 billion euros (35 billion dollars), are aimed at slashing Germany's huge budget deficit.

Berlin is expected to violate the eurozone's 3 per cent of GDP deficit limit for a fifth year in a row in 2006 and Merkel has vowed radical steps to get deficits under the limit by 2007.

Outgoing Chancellor Schroeder, who strongly backs the new government although he will not serve under Merkel, urged his SPD to back the new government with their hearts and minds.

Schroeder said the SPD would never give up its identity but that it was vital for the party to back the grand coalition in order to tackle the country's economic problems.

"I strongly advise you not to try to pretend this was just forced upon us," said Schroeder who has ruled Germany from 1998 to 2005 with an SPD-Greens government.

Merkel's grand coalition of Germany's two biggest political blocs is untypical for the country which generally is led by one of the big parties with a smaller partner in tow.

There has only been one such government in the post-war era - from 1966 to 1969 in the former West Germany.

Germany's September 18 election failed to give either of the big parties a sufficient majority to rule with their normal smaller partners.

Economists and business leaders have criticized Merkel's grand coalition accord for failing to tackle key reforms seen as vital to kick-start Germany's economy which is coming out of five years of stagnation with 11 per cent unemployment.

There are fears that the tax increases will further reduce Germany's already weak domestic demand.

An angry Merkel told CDU members she was sick of business leaders declaring the grand coalition a failure before it had even taken office.

"When I hear criticism I have the feeling some people simply don't understand the situation in which our nation finds itself," she said.

Given policy differences between the CDU/CSU and the SPD, questions are already being raised over how long the Merkel government will hold together.

Volker Kronenberg, a political scientist at the University of Bonn, predicted in an N-TV interview the new government would only last two or at most three years before collapsing and triggering early elections.


Subject: German news

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