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Merkel wins new term to lead new coalition

Published on 28/09/2009

Berlin — Angela Merkel swept to a second mandate in Germany’s election Sunday at the head of a new centre-right alliance she said would jumpstart Europe’s ailing powerhouse economy, preliminary results showed.

"We have achieved our goal of gaining a stable majority for a new government," a beaming Merkel told cheering supporters in Berlin. "I want to be the chancellor of all Germans, so that things improve for our country."

Initial results released on public television showed the 55-year-old Merkel’s conservative Christian Union bloc (CDU/CSU) as the clear winners with about 33.5 percent of the vote.

"The voters have chosen, and the result is a bitter day for Social Democracy in Germany," Merkel’s Social Democrat (SPD) rival, Foreign Minister Frank-Walter Steinmeier, told dejected voters.

"There is no other way of saying it, this is a bitter defeat."

The SPD, junior partners in Merkel’s loveless "grand coalition", plummeted to between 22 and 23 percent — their worst score since World War II — and will be banished to the opposition benches after 11 years in government.

Merkel’s favoured partners, the pro-business Free Democrats (FDP), captured nearly 15 percent, meaning they will return to government for the first time since 1998.

The majority will mean that Merkel, Germany’s first female leader and the only chancellor from the ex-communist east, will serve another four-year term.

Under Germany’s complex electoral arithmetic, their combined score of about 48 percent will almost certainly be enough to put them over the top.

A centre-right coalition has governed Germany for 28 years out of 60 since the post-war republic was founded, making it the most common constellation in German politics.

FDP leader Guido Westerwelle now aims to become vice-chancellor and foreign minister.

Preliminary results were to trickle in during the night, at the end of a campaign dominated by the country’s deep economic troubles. The world’s number-two exporter has been badly hit by the global crisis.

Heightened security after warnings from Al-Qaeda leader Osama bin Laden and other Islamic militants over Germany’s military mission in Afghanistan also cast a shadow over voting.

Merkel enjoyed a strong lead in the polls throughout what was widely criticised as an uninspiring and superficial campaign.

Although Steinmeier, 53, narrowed the gap in recent weeks, it was not enough to prevent a debacle for the country’s oldest political outfit.

Merkel, Forbes magazine’s most powerful woman on the planet for four years running, had argued that Germany needed a new, centre-right government to end its steepest post-war economic downturn.

Awaiting Merkel’s new-look coalition is a bulging in-tray of problems.

Unemployment is forecast to shoot higher, and health care, education and the bloated social security system are in dire need of reform. German public finances are in tatters and its population is ageing fast.

Abroad, the main challenge is Afghanistan, where Germany has around 4,200 troops in the NATO force ensnared in the eighth year of an ever more deadly struggle with insurgents.

With all of the main parties in the Bundestag lower house backing the deployment, with the exception of the far-left Die Linke, the Afghan mission failed to register as a decisive issue.

Die Linke, however, had an exceptionally strong showing with nearly 13 percent of the vote, putting the ecologist Greens in last place with around 10 percent.

If there is not a sufficient effort to build up the Afghan army and police, "the US will have a second Vietnam, and Germany its first," the Berliner Zeitung daily said in an editorial last week.

Merkel moved her conservative party steadily to the centre in her first term in power and the next kingmaker will have a significant say in which tack the government takes.

The FDP is expected to pressure her to push through deep tax cuts to kickstart the economy, sign off on her plans to extend the life of the country’s 17 nuclear reactors and resist efforts by Merkel, a former environment minister, to slash greenhouse gas emissions.

Key proposals of next German coalition government:

— Tax:

The CDU wants to reduce the lowest rate of income tax to 12 percent from 14 percent at present and raise the income level at which the top tax rate kicks in to 60,000 euros (88,000 dollars) from 53,000 euros at present.

The FDP has campaigned for a simplified tax system, with three tax rates of 10 percent, 25 percent and 35 percent.

— Foreign policy:

Both parties agree that Germany should keep its troops in Afghanistan despite the unpopularity of the mission. The CDU is opposed to Turkey’s accession to the EU, preferring instead a "privileged partnership", while the FDP says that Turkey is not ready to join.

— Energy policy:

The CDU and FDP want to extend the lives of some of the country’s 17 nuclear reactors, reversing an earlier decision under ex-chancellor Gerhard Schroeder to mothball them all by around 2020.

— Economy and jobs:

The CDU is counting on sustainable economic growth to pull Germany out of the crisis and create jobs.

The FDP wants to cut corporate tax for small and medium-sized firms, the so-called Mittelstand, from 30 percent to two different levels, 10 percent and 25 percent.

— Family policy:

Faced with a declining population and one of the lowest birth rates in Europe, Christian Democrats and Free Democrats have pledged to improve family policy in Germany.

The CDU wants to double the amount of parental leave Germans can take with a certain amount of their salary paid by the state from 14 months to 28 months.

— Wage and labour policy:

Only the FDP wants to reduce job protection for workers. The CDU supports sector-wide minimum wage accords.

— Military service —

The CDU wants to keep compulsory military service. The FDP wants to scrap it.