• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

CDU backs German coalition agreement

Posted on: Monday, 14 November 2005, 09:18 CST

By Erik Kirschbaum and James Mackenzie

KARLSRUHE/BERLIN (Reuters) - Angela Merkel's conservative Christian Democrats (CDU) overwhelmingly approved a new coalition deal on Monday that puts her at the top of a potentially fragile and unwieldy bipartisan government.

If the Social Democrats (SPD) and the CDU's Bavarian sister party, the Christian Social Union (CSU), also endorse the deal in separate congresses on Monday, Merkel is virtually assured of becoming Germany's first woman chancellor and first from the former communist east.

After a month of negotiations, Merkel's conservatives and their longtime rivals, the SPD of outgoing Chancellor Gerhard Schroeder, announced on Friday they had sealed a pact which foresees a sudden and dramatic consolidation of the German budget in 2007, driven by a rise in sales tax.

The deal has drawn condemnation from industry, which fears the higher taxes will hit German consumers, and from the new opposition parties, who are painting it as a betrayal of the promises the ruling partners made during the election campaign.

Gripes have also come from within the ranks of the coalition parties themselves, particularly conservatives who feel Merkel gave the SPD too much in her quest to become chancellor.

Although she did exact some modest concessions to loosen job protection measures and cut payroll costs -- moves she says are key to encourage German firms to hire -- her party has had to swallow a rise in taxes for top earners and had to abandon its hopes for a shake-up of rules governing wage negotiations.

The dissenting voices in the CDU did not stand in the way of the deal, with just three of over 100 members voting against and one abstaining.

The CSU and the SPD will vote at congresses in Munich and the southwestern city of Karlsruhe, respectively, later on Monday.

If they vote yes, Merkel must still be elected chancellor in the Bundestag lower house of parliament on November 22, but given the coalition partners' overwhelming majority there, that vote is expected to be a formality.

SCHROEDER URGES APPROVAL

Schroeder, who initially refused to concede defeat after the SPD was narrowly edged by the conservatives in a September 18 election, took to the podium in Karlsruhe to urge his party to approve the deal.

"No one is forcing anyone to love this grand coalition or to cheer about it," Schroeder said.

But he told party members, some of them with tears in their eyes, that the agreement contained the undeniable signature of the SPD and was Germany's only chance for a stable government.

"I urge you therefore to give your broad approval."

Party leaders, who were forced into coalition talks after the tight election left them with no other viable alternatives for forming a stable government, are walking a fine line in pushing Germany's first "grand coalition" since the 1960s.

They must appear united behind a program that contains bitter pills for both camps, while simultaneously sending the signal to the party faithful that the forced alliance will not compromise their distinct political identities and values.

The delicate balancing act is occurring against a backdrop of withering criticism in the German media, which is watching closely for signs of cracks in the coalition's facade of unity.

The criticism is focused on bipartisan agreement to bring Germany's budget deficit back within European Union borrowing limits by 2007 -- a colossal challenge requiring upwards of 35 billion euros in savings or extra revenues -- and the means of getting there.

Much of the sum will come from a 3 percentage point rise in value added tax in 2007 -- a move some economists fear could hit weak German consumption and make it tough for the coalition to achieve its chief goal of cutting unemployment, currently at 11.6 percent.

Source: REUTERS

More News in this Category