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Germany's Merkel looks to rocky new term
2009-09-27
BERLIN (AFP) - Fresh from an election victory, Angela Merkel got set for a new term as German chancellor on Monday, facing a stack of challenges topped by an ailing economy and an unpopular Afghanistan mission. "I think we've really earned the right to celebrate tonight," a beaming Merkel, Germany's first female leader and the only chancellor from the former communist east, told jubilant supporters in Berlin late on Sunday. "But I want to say to everyone in this country that I want to be the chancellor of all Germans, so that things improve for our country ... We have a lot of work ahead of us." Europe's biggest economy has been hit harder than most by the global recession, slamming demand for its all-important exports and sending the country into its steepest recession since World War II. Unemployment, identified by Merkel as her "top priority" to tackle, stands at 8.3 percent but is forecast to shoot higher in the coming months, while fighting the slump has blown a massive hole in Germany's public finances. This time around, Forbes magazine's most powerful woman on Earth will be in a different coalition, something she believes will help her implement the reforms that she says are vital for lifting the economy out of its malaise. For the past four years, her conservative CDU/CSU bloc has been stuck in a loveless grand coalition with the centre-left Social Democrats (SPD). But now Merkel is set to govern with the pro-business Free Democrats (FDP). Merkel's bloc and the FDP have a comfortable 332 seats in the 622-member parliament. "Our main objective has been achieved, namely a change of government, which for me is what really counts this evening," Merkel, 55, said on public television on Sunday. Although the wildly popular Merkel savoured her victory, the daily Tagesspiegel said her 33.8-percent score, the right's worst since 1949, marked a "black eye" for the chancellor. Profile: Angela Merkel Turnout was at a record low of 70.8 percent against 77.7 percent four years ago. FDP leader Guido Westerwelle, whose party's strong 14.6-percent showing put Merkel over the top, aims to the country's first openly gay foreign minister. The SPD crashed to 23 percent, its worst result since World War II and will be condemned to the opposition benches after 11 years in government -- four with Merkel and seven in a coalition with the Greens under ex-chancellor Gerhard Schroeder. The FDP, meanwhile, returns to government after 11 years watching proceedings from the sidelines, hoping to get the CDU to cut taxes and to reverse Schroeder's decision to abandon nuclear power by 2020. Even assuming the new partners see eye-to-eye on all issues -- anything but a foregone conclusion -- Merkel's new centre-right cabinet will have its work cut out, however, even without Germany's economic woes. The head of European economics Bank of America Merrill Lynch, Holger Schmieding, said the dawn of a new-look cabinet was "not a revolution". "There will be no dramatic changes but there will be some tax reforms over the next four years, and there will probably be some move towards deregulation modestly in the labour market and probably some changes in the health-care system," he told AFP. The Financial Times Deutschland agreed: "Anyone who expected or feared the chancellor will make a radical change of course with her new government is mistaken." Germany is saddled with health care, education and social security systems all in dire need of reform, its population is ageing rapidly and Merkel faces an uphill task to meet the country's goals on emissions cuts. Poverty rates and unemployment in the former communist East Germany, where Merkel grew up, are much higher than in the west, 20 years after the fall of the Berlin Wall. Abroad, Germany's mission in Afghanistan is highly unpopular and could become a major domestic headache for Merkel in the coming years if an insurgency in the north where its 4,200 troops are based continues to escalate. The presence of German soldiers in Afghanistan has also been followed by a string of threats by Islamic extremists, including from Al-Qaeda leader Osama bin Laden and German-born Muslims.
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