Germany's Merkel kicks off second term

29th October 2009, Comments 0 comments

Merkel’s new government has pledged to help Germany emerge from the global downturn in better shape than before the financial crisis, which sent it into its worst recession since World War II.

Berlin -- German Chancellor Angela Merkel formally embarked on a second term on Wednesday, at the head of a new coalition pledging to make Europe's biggest economy emerge stronger from the financial crisis.

Following her general election victory on September 27, a majority of German lawmakers voted for a second term for Merkel, with 323 in favour, 285 against and four abstentions.

"I accept the result and thank you for your trust," she said, as lawmakers applauded and presented her with bouquets of flowers in the main chamber of the Reichstag parliament building.

Merkel, now 55, became Germany's first female chancellor in 2005 as well as its first leader from the former communist East Germany, and its youngest.

In last month's general elections, Merkel, was able to ditch her previous partners, the centre-left Social Democrats (SPD), for a tie-up of her conservatives with the pro-business Free Democrats (FDP).

The new government has pledged to make Germany, accounting for a third of eurozone output, emerge from the global downturn in better shape than before the financial crisis sent it into its worst recession since World War II.

It has promised 24 billion euros (35.6 billion dollars) worth of tax cuts, something that will push Germany's mammoth national debt still higher and put it in breach of European Union deficit rules for several years to come.

Merkel has ruled out large reductions in government spending, however, saying this could jeopardise Germany's fragile recovery, and that the economic growth that the tax cuts will trigger will eventually help cover the cost.

Other policy aims include reforms to Germany's creaking health care system, although the details have yet to be hammered out.

Germany, one of the world's biggest exporters, has been hit harder than many advanced economies by the global downturn, with output set to contract by around five percent this year.

"In such a unique economic crisis the state must do the little that it can do to boost growth, financed by higher debts," Wolfgang Schaeuble, Merkel's new finance minister, told Stern magazine on Wednesday.

"First what we have to do is to make it through the crisis -- afterwards we can consolidate," Schaeuble said.

Economists are sceptical that the tax cuts will do much to boost domestic consumption, the weak point of the German economy, although many agree that Merkel has little choice in the current circumstances.

The economy is not the only challenge facing Merkel in her second term.

Figuring highly will be Germany's increasingly unpopular mission in Afghanistan, with its about 4,200 troops based there facing an ever more tenacious insurgency and Berlin under pressure from its allies to do more.

Merkel has been pressing for an international conference on the troubled eight-year-old mission to result in Afghans assuming more responsibilities so that foreign troops can go home.

The chancellor's first foreign trip in her new term was due to take her to Paris later on Wednesday for talks over dinner with French President Nicolas Sarkozy.

Next Tuesday, Merkel is due to become the first German chancellor since Konrad Adenauer, West Germany's first postwar leader, to address both houses of the US Congress.

Germany's new cabinet line-up:

Chancellor: Angela Merkel (CDU)

Foreign minister and vice-chancellor: Guido Westerwelle (FDP)

Finance minister: Wolfgang Schaeuble (CDU)

Defence minister: Karl-Theodor zu Guttenberg (CSU)

Interior minister: Thomas de Maiziere (CDU)

Economy minister: Rainer Bruederle (FDP)

Justice minister: Sabine Leutheusser-Schnarrenberger (FDP)

Health minister: Philipp Roesler (FDP)

Family minister: Ursula von der Leyen (CDU)

Labour and social affairs minister: Franz Josef Jung (CDU)

Environment minister: Norbert Roettgen (CDU)

Transport minister: Peter Ramsauer (CSU)

Education and research minister: Annette Schavan (CDU)

Agriculture minister: Ilse Aigner (CSU)

Development minister: Dirk Niebel (FDP)

Chief of staff: Ronald Pofalla (CDU)

Simon Sturdee/AFP/Expatica

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