BERLIN: German Chancellor Angela Merkel was sworn in for a third term after being reelected in a vote in the lower house of parliament on Tuesday.
Her coalition government will rule Europe’s biggest economy for the next four years.
The Chancellor won the parliament election with 462 votes in favor, with 150 voting against and nine abstentions. Merkel was formally appointed by German President Joachim Gauck at the president’s official residence and headed back to the parliament to be sworn into office, thus becoming the country’s third post-war chancellor to win a third term.
Merkel will address the parliament on Wednesday and then travel to Paris to meet President Francois Hollande in her first foreign visit of the new term.
Cabinet ministers of the new coalition government, formed by Merkel’s Christian Democratic Union (CDU), its Bavarian sister party Christian Social Union (CSU), and the Social Democrats (SPD), were also formally appointed and took the oath in the parliament.
Prominent members of the new cabinet include Ursula von der Leyen, the country’s first female defence minister, and finance minister Wolfgang Schaeuble, who joined hands with the chancellor in Germany’s efforts to fight the eurozone debt crisis.
SPD party leader Sigmar Gabriel became minister of a new Economy and Energy Ministry and take responsibility for Germany’s ambitious plan of energy transformation from nuclear power to green energy. SPD veteran Frank-Walter Steinmeier is back as the foreign minister. He has served in that post from 2005-2009 under Merkel.
The new cabinet put an end to more than two months of political limbo after the Sept. 22 elections when Merkel’s bloc, the biggest winner with 41.5 percent of votes, fell short of an absolute majority. The SPD took 25.7 percent of the votes.
The grand coalition between Merkel’s conservatives and the SPD, as in Merkel’s 2005-2009 first term, is supported by most Germans, as a poll for public broadcaster ZDF published Friday showed that 49 percent of Germans welcome a grand coalition while 33 percent opposed it.
However, the coalition government was only able to become a reality last week as a majority of the SPD members backed the proposed coalition deal in a binding vote within the party. Some SPD members harbor skepticism on becoming Merkel’s junior partner again. The party suffered a electoral defeat in 2009 after serving as Merkel’s junior coalition party in her first term.
SPD chief Sigmar Gabriel has worked hard to convince his party members to support the left-right government as he won key concessions from Merkel’s camp on SPD’s core concerns and centerpiece policies during the coalition talks.
During the coalition talks, the SPD insisted on the introduction of a national minimum wage of 8.50 euros (11.41 U.S. dollars) per hour, which was a key election platform. Although Merkel has repeatedly reiterated her opposition to the national minimum wage on concerns that it would destroy jobs, she finally gave in.
The national statutory minimum wage is scheduled to be introduced in Germany from January 2015. Merkel said earlier that she would try to prevent job losses that may be caused by the move.
Among other agreed policies proposed by the SPD, dual citizenship will be allowed for children who grew up in Germany and were born after 1990 to foreign parents. Currently they have to choose between German citizenship and that of their parents when they reach 23 years of age.
But the CDU held its ground as the parties agreed there should be no tax rises. The SPD had demanded to raise taxes on incomes above 100,000 euros to 49 percent from 42 percent. Merkel has said such tax hike plans would risk spoiling the good situation of the country’s economy.
According to the coalition agreement, the new government will spend an additional 23 billion euros by 2017 without tax increases. The government will also not undertake new borrowing from 2015. The additional money will be invested in areas including infrastructure, education, research and development.
Other agreed policies included lower retirement age from 67 to 63 for those who made pension contribution for 45 years, and reforms of the current Renewable Energy Act.
STABLE EUROPEAN POLICIES
Merkel is expected to continue championing painful structural reforms and spending cuts by indebted countries, despite the SPD’s call for more pro-growth measures during the election campaign.
“We will not develop a union of debt but a union of stability,” said Merkel last month after her bloc signed the agreement with the SPD on forming a coalition.
SPD leader Sigmar Gabriel also said that preserving the eurozone will be a key policy of the new German government, whose European policy will secure the “stabilization of the euro and the eurozone”.
Although the coalition talks mainly focused on domestic issues, both sides reached consensus on European issues as the agreement notes that “Germany can only go well if Europe had a good future.”
The coalition partners agreed on pushing for a European level financial transaction tax despite very different views among the 11 supporting nations. The proposed tax consists of a rate of 0.1 percent on the trading of bonds and shares and 0.01 percent for derivatives deals.
Put forward by the European Commission in September 2011, the introduction of such a tax could raise as much as 35 billion euros (45 billion U.S. dollars) a year. But the proposal has to be approved by all the nations that agree to participate before it becomes law.
The coalition agreement emphasized Germany’s opposition to any mutualization of eurozone countries’ debt, including the eurobonds, and stressed the principle of solidarity and responsibility.
On plans for a European banking union, the coalition partners rejected the idea that taxpayers have to directly shoulder banks’ risks, making it clear that eurozone member states have primary responsibility for dealing with their troubled banks and can only use taxpayer-financed European fund as the last resort.
In addition, the coalition partners also agreed to stick to structural reforms in troubled European Union member states in order to improve their competitiveness and growth.
In fact, Merkel’s domestic popularity owes much to sticking to principles in dealing with the eurozone debt crisis, including pressing indebted eurozone members to carry out austerity measures and reforms. She has said it was her responsibility as chancellor to keep the reform pressure on Greece.
The grand coalition is welcomed by other European countries. French President Hollande and Spanish Prime Minister Mariano Rajoy hailed the coalition deal as a boon for Europe in a bilateral meeting in Madrid last month. PNA