Angela Merkel

Angela Merkel is set to become Germany's first female chancellor as a result of an agreement between her Christian Democratic party and its Social Democratic rivals.  The country's two-biggest parties have agreed to equal representation in the new government, but they still have to hammer out an accord on what that government's policies will be.

The agreement to form a so-called grand coalition came three weeks after an inconclusive election that left both major parties without nearly any chance of forming a government unless they joined forces. 
 
Although Ms. Merkel's Christian Democrats won more seats than outgoing Chancellor Gerhard Schroeder's Social Democrats, Mr. Schroeder initially refused to step down, saying his challenger did worse than expected in last month's election and therefore should not assume Germany's top political job.

But it appears Ms. Merkel has won her claim that she should be chancellor, although she still has to be elected to the post by a two-thirds' vote in parliament.

As part of the deal to govern with the Social Democrats (SPD), she has had to give the rival party eight cabinet seats, including the prestigious foreign and finance ministries.  The Christian Democrats (CDU) will get six cabinet posts plus the chancellorship and the presidency of the Bundestag, the lower house of Parliament. 

But Mr. Schroeder, it appears, will not be part of the new government.

Ms. Merkel told reporters in Berlin that over the next four weeks the two parties will try to agree on a common policy platform for the new government.

"We will have negotiations with the SPD, in order to form a grand coalition," she said.  "The basis for this were the agreements in our talks [over] the past days.  The CDU has the chancellorship.  The CDU and the SPD have an equal number of ministers."

Both Ms. Merkel and SPD party chief Franz Muentefering stressed that the main goal of the new government will be to reduce Germany's nearly 12 percent unemployment.  The two parties agree on the need for economic reforms, but differ on how far-reaching they should be.

Analyst Thomas Kielinger, who writes for Die Welt, a major German newspaper, says the crucial bargaining between the two parties lies ahead.

"This is the solution of the personnel question, who gets what seats and under what terms," he said.  "They can agree on that.  Now, the proof of the matter lies in the actual programs and what kind of coalition program you are going to see emerge."

Mr. Kielinger and other analysts have long warned that a government of Germany's two big parties could be so divided that it will be unable to take tough and potentially unpopular action to revive the country's economy.

The negotiations to agree on future policies are expected to last until mid-November.