German coalition
February 3, 2010
Germany's federal elections in September provided contrasting fortunes for the two parties that went on to form the new government.
The Free Democrats (FDP) achieved their best ever result in a national election - 14.6 percent of voters chose the business-friendly party.
While Chancellor Angela Merkel's Christian Democratic Union (CDU) and its sister party, the CSU, only managed to get 33.8 percent, a historic low. A coalition partner was needed and the FDP was not only raring to go, but also the Christian Democrats' partner of choice.
A hundred days on, voters' enthusiasm has waned somewhat, as regional elections in North Rhine-Westphalia loom, and the coalition partners struggle to find common ground.
Crucial regional elections
North Rhine-Westphalia is Germany's most populous state, so the elections there on May 9 are seen as major test for the government.
Perhaps most pressing on the political agenda is how to deliver tax reform without increasing government spending too much. The Free Democrats are keen to make good on the campaign promise of substantial tax breaks.
But Germany's finance minister, Christian Democrat Wolfgang Schaeuble, has stressed fiscal discipline must be a priority.
Germany's central bank, the Bundesbank, expects the budget deficit to reach 5 percent of gross domestic product this year, 2 percent above the limit set by the EU.
"There's one central problem that hasn't really been addressed," Nils Diederich, professor for political science at the Free University in Berlin told Deutsche Welle. "The Free Democrats want major tax breaks and tax reform. But on the other hand, more spending is needed to tackle the economic crisis. No one has come up with a plan to solve this problem without jeopardizing an already bloated budget deficit."
Measures such as a government-subsidized program that allows firms to shorten the working week have helped keep unemployment at bay for now.
Worried voters
Shorter working hours were introduced last year to allow companies to safeguard jobs and retain talented employees. The state-funded Institute for Employment Research (IAB) estimates that the measure saved 1.2 million jobs last year.
But voters are unhappy with the government, according to the latest poll by the Emnid institute. Several cabinet ministers received negative approval ratings, particularly those representing the FDP. Only 21 percent of those polled believe that FDP Economy Minister Rainer Bruederle is doing a good job, while FDP Health Minister Philipp Roesler was rated good by only 31 percent.
Only 61 percent believe that Merkel is doing a good job, while 34 percent disapproved of her leadership. The most popular cabinet minister is Defence Minister Karl-Theodor zu Guttenberg, whose approval rating was at 65 percent.
"The biggest problem for Germans is the state of the country's finances," says Klaus-Peter Schoeppner, managing director at Emnid.
"Voters are afraid of going backwards, of not being able to afford as much as before. It's the first time they've had to deal with the effects of globalization and a high budget deficit. That makes Germans insecure," Schoeppner told Deutsche Welle.
The war in Afghanistan is another thorny issue. Peace-loving Germans are not in favor of the Bundeswehr's mission there. But most political parties agree that leaving Afghanistan to fend for itself at this point would be foolish.
A new Afghanistan strategy
After weeks of wrangling between Foreign Minister Guido Westerwelle of the FDP and Defense Minister Karl-Theodor zu Guttenberg (CSU), the government presented a united front at the Afghanistan conference in London.
Chancellor Angela Merkel has promised NATO 500 extra troops, plus a reserve unit of 350 soldiers. But the increase is aimed at boosting training and civilian protection rather than combat activity. Germany currently has around 4,300 troops in Afghanistan.
Guttenberg had hoped for at least 2,000 extra troops, as requested by Washington, but Merkel was keen to stress the importance of the new strategy.
"Regarding our soldiers in the north of Afghanistan, we will create training and protection units responsible for the training of the Afghan police force through 2011," she said in January. "Our new strategy is to focus on civilian protection and training, it's a much more defensive approach and we will rearrange our troops to accommodate this."
Health issues
Meanwhile, Health Minister Philipp Roesler, a Free Demcrat, is at loggerheads with the influential CSU premier of the state of Bavaria, Horst Seehofer, over how to reform the ailing German health service.
The German association of health insurers (GKV) expects a combined deficit of 7.8 billion euros ($10.8 billion) for its members in 2010. Rising costs for treatments mean the government is looking for ways to improve the system.
Roesler is determined to introduce a flat rate for healthcare contributions, meaning that everybody pays the same amount. Those who cannot afford the payment would get a state subsidy.
"I think it's clear to everybody that we need a change in health policy," Roesler told German television last week.
"We have to do better, and when we present our concept I'm convinced that I can persuade my colleagues in the CDU and CSU of my plans."
Seehofer, who is the head of the Christian Democrats' sister party in Bavaria, is among those who have dismissed the plans as unworkable, not least because a large part of the population would not be able to pay their share.
Author: Nicole Goebel
Editor: Nancy Isenson