Merkel puts finishing touches to coalition

Published on Saturday 24 October 2009 19:55

GERMAN chancellor Angela Merkel unveiled a new centre-right coalition government yesterday, announcing an overhaul of the healthcare system, tax cuts of up to €24 billion (£22bn) and a call for the withdrawal of nuclear weapons from the country.

Merkel said the coalition of her Christian Democrats, their Bavarian sister party the Christian Social Union and the pro-business Free Democrats was capable of solving the country's problems after last month's parliamentary elections.

Free Democrats leader Guido Westerwelle said at a joint news conference that the coalition agreement was "a great compass for our country".

He added that he wants all nuclear weapons to be pulled out of Germany – an issue that may prove vexing to Nato allies. Merkel made no immediate pledge on that issue. The coalition agreement is expected to be approved tomorrow.

The chancellor announced some members of her new Cabinet, while Westerwelle said he would present the Free Democrats' ministers to his party first. Westerwelle himself is expected to become foreign minister and vice-chancellor.

Merkel said economy minister Karl-Theodor zu Guttenberg will become the defence minister, tasked with handling Germany's unpopular mission in Afghanistan. He replaces Franz Josef Jung, who is to take over at the labour ministry.

Interior minister Wolfgang Schaeuble,67, is expected to take the key finance minister position, a move that would put the veteran Christian Democrat in charge of tending Germany's strained budget.

Ahead of the elections, both parties advocated tax cuts to spur economic growth. However, they differed on how far to go at a time when efforts to combat the economic crisis have pushed up debt.

Schaeuble is one of Germany's most experienced politicians. He has been interior minister since 2005 in Merkel's outgoing coalition of right and left, his second stint as the country's top security official.

Schaeuble has championed tougher security laws, in particular anti-terrorism legislation granting federal police the power to spy on computers.

The popular Ursula von der Leyen is expected to retain her post at the ministry for family affairs. The health ministry goes to the youngest cabinet member, Philipp Roesler, 36, while the new economics minister is to be Rainer Bruedele, both of the Free Democrats. A cornerstone of the coalition agreement is reform to the healthcare system. It is expected to include a freeze on employers' contributions, meaning individuals will carry the burden of any cost increases.

Child benefits and tax write-offs for families with children are to be increased in 2010, making good on an election promise by the Free Democrats.

Westerwelle's call to remove nuclear weapons echoed calls made by then chancellor Gerhard Schroeder's Social Democrats in 2005. During the Cold War, the United States based nuclear weapons in Germany as part of its deterrent against Warsaw Pact forces. Since the Berlin Wall came down in November 1989, it has removed 95 per cent of those weapons.

The previous call to remove the weapons drew concern from Nato members, and any concerted effort to take up the issue again would require negotiations with those states.