Merkel Vows Economic Reforms in Second Mandate

German Chancellor Merkel vowed to bringing economic prosperity to the country after being re-elected.
Merkel Vows Economic Reforms in Second Mandate
German Chancellor and leader of the Christian Democratic Union (CDU) Angela Merkel waves during the election evening after parliamentary elections at the CDU headquarters in Berlin on last Sunday. (Joerg Koch/AFP/Getty Images )
Kremena Krumova
9/28/2009
Updated:
10/1/2015

<a><img src="https://www.theepochtimes.com/assets/uploads/2015/09/merkel-91204064.jpg" alt="German Chancellor and leader of the Christian Democratic Union (CDU) Angela Merkel waves during the election evening after parliamentary elections at the CDU headquarters in Berlin on last Sunday. (Joerg Koch/AFP/Getty Images )" title="German Chancellor and leader of the Christian Democratic Union (CDU) Angela Merkel waves during the election evening after parliamentary elections at the CDU headquarters in Berlin on last Sunday. (Joerg Koch/AFP/Getty Images )" width="320" class="size-medium wp-image-1826033"/></a>
German Chancellor and leader of the Christian Democratic Union (CDU) Angela Merkel waves during the election evening after parliamentary elections at the CDU headquarters in Berlin on last Sunday. (Joerg Koch/AFP/Getty Images )
German Chancellor Angela Merkel declared her commitment to bringing economic prosperity to the country after being granted a second mandate as leader of the biggest European economy after last Sunday’s elections.

In a post-election statement, Merkel announced her top priority will be economic recovery and fighting unemployment. She also vowed to be chancellor of “all Germans.”

Radical Tax Cuts

The business-oriented liberal Free Democrats (FDP), which will be Merkel’s partners in the new government, will push for radical tax cuts to the tune of 35 billion euro (US$51 billion). These funds are supposed to revive the economy.

They will, however, diminish GDP by 6 percent and will limit the government’s monetary leverage—the FDP is therefore reluctant to say when exactly this is going to happen. Merkel gave an approximate vision, however.

“We want to do two steps ... these two steps could be in 2011 and 2012, or they could be 2011 and 2013 or they could be in 2012 and 2013. Those are the three possibilities,“ she said during a press conference after the election.

Whatever the case, tax cuts will have to wait until the cabinet is formed, which should happen within a month. Another factor will be the privatization of Opel, a large automaker; state aid for the company is also going to be reviewed.

FDP will also strive for simplification of Germany’s tax system.

Labor Conditions

As a more free-market oriented cabinet develops, Germany will have difficulty keeping down soaring unemployment, which now stands at 8.3 percent. It is yet to be seen what will happen after the stimulus packages expire—the country may face a winter of discontent.

Merkel plans neither to remove minimum wages rates nor extend them to more industries. Two tendencies will clash when it comes to employees’ dismissal rules in the new cabinet. Also, the FDP is likely to require loosening the rules, but the conservatives will oppose, not wanting to lose next year’s elections in Germany’s most populated province, North Rhine-Westphalia.

A Bitter Victory

Despite the victorious results, some commented that Sunday’s was not a brilliant election feast.

The newspaper Die Welt said that the result was “bitter” for Merkel’s party and “particularly for the Chancellor.”

Frankfurter Allgemeine Zeitung reported decreasing support for the conservative Christian Democratic Union under Merkel.

This year’s election was the worse result for German’s right-wing in 60 years. The turnout was also at a low point, with 70.9 percent of voters compared with 77.7 percent turning out in the last election four years ago.

Nevertheless, “The result is good for Germany, good for Europe, and good for a democracy that needs clear direction as well as a strong mandate,” said London’s The Times.

During a press conference right after the election results were revealed, Merkel herself pointed out that “Our main objective has been achieved, namely a change of government, which for me is what really counts this evening.”

Cabinet Within a Month

The re-elected German leader considered that a coalition between the liberal Free Democrats (FDP) and her center-right CDU/CSU bloc would ensure the best chances for economic recovery.

The two parties have enough votes to secure majority in the parliament: 332 out of total 622 seats.

The new cabinet, which should be finalized within a month, will exclude the center-left Social Democrats (SPD) after its worst election results since 1949.

SPD leader Frank-Walter Steinmeier warned that his party would be “vigilant in opposition,” as reported by the BBC.

Guido Westerwelle, FDP leader and purportedly the next foreign minister, said the new government would act “responsibly,” and that “Now the work starts for real ... for Germany and our people,” according to the BBC.

Greetings From World Leaders

In an official statement from the White House, U.S. President Barack Obama expressed his delight with Merkel’s re-election by saying that he looked “forward to continued close cooperation with chancellor Merkel to address our common challenges in the years ahead,” and that “the United States and Germany are close allies, and partner together around the world to promote freedom, security, and prosperity.”

A spokesperson of Downing Street said U.K. Prime Minister Gordon Brown welcomed the poll’s results and is “looking forward to continuing our close working relationship.”

French President Nicolas Sarkozy said that the sweeping victory was due to the great public confidence in Merkel’s policy. Italian Prime Minister Silvio Berlusconi phoned Angela Merkel personally, according to ANSA news agency, to share his “common vision and engagement to building a strong and united Europe.”

[etDetailsBox Election Results in Germany]
CSU/CDU: 33.5%
SPD: 23.3%
FDP: 14.6%
Green Party: 10.5%
The Left: 12.5%
[/etDetailsBox]

 

 

Kremena Krumova is a Sweden-based Foreign Correspondent of Epoch Times. She writes about African, Asian and European politics, as well as humanitarian, anti-terrorism and human rights issues.
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