Germany hails first woman chancellor as problems loom

By Rohan Minogue Nov 22, 2005, 17:37 GMT

Berlin - The ink was barely dry on the official document which President Horst Koehler handed Angela Merkel on taking office as Germany's first woman chancellor Tuesday, before she faced the country's serious problems.

Merkel immediately called her cabinet of 15 together to begin discussions on how to pull Germany out of years of sluggish growth and curb its burgeoning fiscal deficit.

That cabinet is an unusual one by the standards of modern Germany. It contains Christian Democrats and Social Democrats - the two largest parties and traditional political enemies - in equal measure.

Electoral arithmetic compelled Christian Democrat Merkel to seek as coalition partner the very party she had railed against in the pre-election campaign.

The Social Democrats hold key posts, putting up the vice- chancellor, the finance minister and the foreign minister.

That will not make governing any easier, and commentators were quick to suggest the coalition would not last long.

The Moscow daily Kommersant pointed to unemployment at 11 per cent and record state debts.

'It is uncontroversial to say that Merkel's chances of retaining office for the full term are slim,' it said.

The International Herald Tribune offered the view that the coalition could stagger on for the full four years 'if only because the electorate will punish any party to the coalition that stops cooperating and forces new elections, which might be as inconclusive as the election in September'.

The problems lie not only at home.

The European Union's long-term budget for 2007-13 is proving a hard nut to crack, and Germany finds itself caught in the middle of a fight between France and Britain, the two other E.U. heavyweights.

Britain won't surrender its large annual rebate on payments to the union, as demanded by most E.U. members, unless France gives up the huge agricultural subsidies to its farmers.

The French have refused, and crisis looms.

In foreign policy, Merkel is certain to move away from the close ties her predecessor, Gerhard Schroeder, had with Russia's Valdimir Putin.

But she cannot ignore the fact that Germany is dependent on Russia for a large proportion of its energy supplies.

By contrast, her plans to improve ties with the United States, coming after a freeze over Schroeder's rejection of U.S. policy on Iraq, will be welcomed in Washington and greeted with a sigh of relief from many German diplomats. <!--page-->

Turkey and its long-hoped-for membership of the E.U. present a much thornier problem. Merkel wants to offer the large Moslem country only 'privileged partnership'.

Officially, the E.U. is conducting negotiations aimed at leading to full membership in 10 to 15 years.

Only once before has Germany been ruled by this kind of grand coalition.

In the period 1966-69 Kurt Georg Kiesinger headed a similar cabinet that also faced problems of sluggish growth and rising unemployment.

Historians looking back agree that the coalition did indeed tackle those problems effectively.

But there was an unfortunate side. The lack of a credible opposition within the Bundestag is seen as having given a boost to the 'extra-parliamentary opposition' as the broad-based protest movement that erupted in 1968 is often known.

Koehler referred to that mixed legacy as he wished Merkel 'much luck, strength and God's blessing'.