Germany's incoming Chancellor Merkel faces new test

Christian Democrat (CDU) leader and German Chancellor-designate Angela Merkel rings a bell before a meeting of the CDU parliamentary group in Berlin. Picture / Reuters

BERLIN - Germany's incoming Chancellor Angela Merkel has unveiled her new government's policies but her skills as leader face a big test if the coalition of traditional rivals is to work together for four years.

After a month of talks, the "grand coalition" of Merkel's conservatives (CDU/CSU) and centre-left Social Democrats (SPD) unveiled its policy platform on Saturday, pledging to bolster Germany's ailing public finances and cut chronic unemployment.

For the moment, despite criticism from the media and lobby groups, the atmosphere between politicians who as recently as two months ago were blasting each other as liars and incompetents has been surprisingly friendly.

Media reports say former opponents have started to use the familiar "Du" form with each other in conversation.

Franz Muentefering, the SPD traditionalist who will serve as Merkel's deputy, is even reported to have been sharing cigarillos with the CDU's new general secretary Ronald Pofalla.

But few believe the harmony will not be severely tested by the daily attrition of government and pressure from party members already dismayed at concessions to the other side.

"We've paid a damned high price for the Chancellery," Friedrich Merz, one of the CDU's top finance specialists who is also one of Merkel's most prominent internal critics told the Frankfurter Allgemeine Sonntagszeitung newspaper.

On the left, Muentefering, who has already lost his post as SPD chairman after party wrangling, warned SPD members not to demand too much from the government.

"We're in the house of what's possible and we can't on the other side have the party in the house of what might be wished for," he told the Badische Neueste Nachrichten newspaper ahead of an SPD party congress in the southwestern town of Karlsruhe.

With neither main party able to form the government it wanted after the inconclusive September 18 election, both sides have an interest in making the coalition work and party conferences this week are expected to approve the coalition deal.

Merkel is then expected to be elected chancellor by the Bundestag on November 22.

With a budget deficit that has repeatedly breached European Union borrowing rules, unemployment running at over 11 per cent and a social security system in urgent need of reform, she has promised unpopular measures that are sure to make enemies.

She has already had a taste of what to expect when Bild, Germany's most popular daily, portrayed her with Pinocchio's nose as it attacked her for "tax lies" following the decision to lift Value Added Tax by three points to 19 per cent.

Unions have attacked plans to loosen job protection rules while Dieter Hundt, head of the BDA employers' federation said the coalition does not go far enough to cut government spending.

Roland Koch, state premier of Hesse and one of the main conservative architects of the accord, said critics were overlooking the extent of the problems facing Germany.

"The budget situation was worse than the public knew," he told the Welt am Sonntag weekly. "I'm not even sure that any other political grouping would have been able to resolve this crisis in the face of such bitter opposition."

Neither side is overjoyed at the prospect and both describe the coalition as a "marriage of convenience" but for now, they say they are prepared to make it work for at least four years.

"Anything else would be irresponsible," Muentefering said.

- REUTERS