Friday, November 18, 2005

News: New Government Agreed ...Finally

From the Current Affairs Desk...

So they finally did it. Well done folks. Now, let us see if you can last the four years...

Germany has a new government. Angela Merkel is the first female Chancellor. Merkel's centre-right CDU/CSU and the party of outgoing Chancellor Schroeder, the centre-left (ha!) SPD have finally agreed a deal. If you want to know what happened throughout the election campaign and in its messy aftermath, you could do worse than having a browse through the 2005 Election pages from Deutsche Welle.

I also found this post by a New Zealander that goes by the name of the Berlin Bear on his blog The Capital Letter that very accurately analyses the situation.

Having finally got there it seems, to this observer at least, that this historic agreement has offered up more questions than it raises. How can two parties that spent the entire election campaign predicting the dire consequences should the other prevail work together for four years? How will increasing VAT increase consumer spending and kick-start the economy? What happens if the President declares the 2006 budget unconstitutional?

The way I see it is this: Germany is in a malaise of sorts, although it remains a fine old place to live, but this coalition agreement seems to me to be a recipe for well, nothing much. No-one, from the unions to industry seems happy with it, and 3% on everything you buy will be felt by all but the deepest of pockets. Meanwhile, as the coalition limps on the new Left Party - who currently no-one wants to work with - will continue to pick up disillusioned voters from the SPD and will probably hold the balance of power again in the next election unless the CDU/CSU-FDP can somehow cobble together a majority.

In the meantime the FDP will get more vocal about the need for radical, neo-liberal change, and will have the CDU/CSU over a barrel in any future coalition between the two, and likewise the Left Party will increase the pressure on the SPD to move back towards the Social Democratic left that Schröder (like his former Third Way buddy Blair) abandoned. Next time around such a Grand Coalition as we got today could be all but impossible to form.

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