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Germany: Angela Merkel’s coalition deal

Angela Merkel agreed a deal on February 07, 2017 to form a new coalition government in Germany, more than four months after suffering damaging losses in elections. Mrs Merkel reached an agreement with her former coalition partners, the centre-left Social Democrats (SPD), after the longest period without an elected government in postwar Germany. She expressed the belief that the agreement can be the foundation of a good and stable government, which Germany needs and which many around the world expect of the country. The coalition agreement includes commitments to strengthening the EU and working with France on Eurozone reform. It pledges to work towards turning the Eurozone bailout fund into a full-blown European Monetary Fund, and says Germany is “prepared for higher contributions to the EU budget”.

The coalition has been weaved on many compromises. According to Wolfgang Steiger, the head of the CDU’s economic council, for the CDU, the allocation of ministries is a miserable result to the negotiations. He described the coalition agreement as “not the spirit of the future, but the garbage of redistribution”. After ceding control of so many ministries — the SPD claimed six in all — Mrs Merkel may find herself left with few choice portfolios to keep potential rivals within her own party quiet. Mrs Merkel has lost two of her most powerful allies in the party, and looks increasingly lonely. Wolfgang Schäuble, the longserving finance minister, has left to become speaker of parliament, while Thomas de Maiziere, who served as interior minister, said yesterday (WED) he was standing down from office. The next hurdle for Mrs Merkel and her potential new government will be when SPD members vote on whether to approve the coalition agreement starting on February 20.

Nevertheless, the deal could bring an end to months of uncertainty in Europe’s dominant power and biggest economy. But the relief in Berlin came at the cost of shock following the SPD leader, Martin Schulz’s announcement that he would be stepping down and taking a cabinet post as foreign minister instead. The coalition deal also came at a significant cost to Mrs Merkel, who had to relinquish control of the three great ministries of state and agree to a number of demands from her coalition partners. And it still has to be approved in a vote by the full SPD membership — where it is facing a challenge from rebels who have sworn to prevent a new Merkel government and mounted a Momentum-style campaign to sign up new members to vote No.

Merkel is facing a challenge from the rebels led by the party’s youth wing, the Jusos, managed to sign up more than 24,000 new members in their Momentum-style campaign to block a coalition before a deadline expired on February 06. With the party membership at over 440,000 and no reliable polling data, it is not clear whether it will be enough to swing the result, which is expected to be announced on March 4.

Mrs Merkel has been fighting to stay in power since since her first attempt to form a coalition after September’s elections collapsed.Her former coalition partners in the SPD came to her rescue but they exacted a heavy price for their support, and the new government is set to be much more active in pursuing greater European Union integration and Eurozone reform. Martin Schulz, the former European parliament president who has called for a “United States of Europe” is now set to become foreign minister. Andrea Nahles will take over as leader where she is expected to focus on rebuilding the party, which suffered its worst ever result in September’s election. Instead he has decided to pass that job to Ms Nahles. At the foreign ministry the federalist Mr Schulz will be able to direct Germay’s EU policy. And he will have the supporty of a party colleague at the finance ministry. Olaf Scholz, the current mayor of Hamburg, is set to become one of the most powerful figures in government as both finance minister and vice-chancellor.

There are many remarkable indications in the coalition agreement. It mentions that after Brexit, making Germany more attractive for financial institutions is an important possibility. In a sign of another key policy shift, the most outspoken critic of Mrs Merkel’s “open-door”refugee policy is to be handed direct control of the issue as interior minister. Horst Seehofer, the leader of Mrs Merkel’s Bavarian sister party, the Christian Social Union (CSU), will take over a beefed up interior ministry with expanded powers. Under the coalition agreement, there will be an upper limit of 220,000 on the number of asylum-seekers allowed into Germany each year, and restrictions on family reunification for those already here. But there were angry reactions from Mrs Merkel’s own Christian Democrat party (CDU) at the number of concessions she made.

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