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German Chancellor Plans New Coalition

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Fresh from her election victory on Sunday, German Chancellor Angela Merkel is planning to hold coalition talks with the pro-business Free Democrats (FDP) about forming a new coalition government. She says she hopes to form a new center-right government within a month and signaled her priority will be to bring Germany out of recession and back to prosperity.

German Chancellor Angela Merkel is hoping to have her new governing coalition in place in time for the 20th anniversary of the fall of the Berlin Wall November 9th. She says quality will take priority over speed, but that Germany deserves a new government as soon as negotiations can produce one. Her Christian Democratic Union plans to pair with the pro-business Free Democratic Party led by Guido Westerwelle.

"We want now to co-govern Germany because we have to make sure that there is a fair tax-system, better education-chances and that the citizens rights are finally respected again," said Westerwelle.

The Free Democrats advocate a radical overhaul of Germany's tax system, with cuts both at the top and bottom ends of the spectrum, but Ms. Merkel has promised moderate income tax relief. The Free Democrats will be the junior member of the coalition, so the new government under Ms. Merkel is not expected to make huge changes.

Soon after winning the election, she seemed mindful that she will have to maintain middle ground to stay popular.

She says she plans to be a Chancellor for all Germans, something she says is needed, especially in this time of economic crisis

Germany is Europe's largest economy, largely dependent on exports. While there have been signs that the country is emerging from its deepest recession since World War Two, challenges remain. Unemployment is set to rise even further, and a possible credit crunch still looms.

Germans voted for change by ousting the Social Democratic party, which for the past four years has ruled with Ms. Merkel in a grand coalition. The Social Democratic leader called the election result a bitter defeat and promised his party would be a strong voice in opposition.