Germany's Marriage of Necessity. The Jean Monnet/Robert Schuman Paper Series. Vol. 1, No. 8. November 2005

Cameron, Fraser. (2005) Germany's Marriage of Necessity. The Jean Monnet/Robert Schuman Paper Series. Vol. 1, No. 8. November 2005. [Working Paper]

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Abstract

[Overview]. Today Germany will have its first female Chancellor, its youngest (51) head of government and the first from the former communist eastern part of the country. This will be only the second time since 1949, and the first since Germany was reunited in 1990, that the country will experience a grand coalition of Christian and Social Democrats. It was a lengthy and difficult process, rather like “mating porcupines” according to outgoing Chancellor Gerhard Schroeder. What will be their priorities and what are the chances of success? To most Germans the coalition will be judged on whether it can reduce the country’s huge five million unemployment figure. This will require renewed economic growth but there are sharp differences between the parties on how best to achieve this. There is little talk of renewal or flexibility. There is, however, greater agreement on the need to restore the public finances to good order and the parties have agreed a number of tax increases in an effort to reduce the ballooning budget deficit. Two other key areas are pension and healthcare reforms. For many years Germans have been used to lavish welfare benefits but the state can no longer afford such largesse. Getting the public to accept the need for cuts is another matter. On foreign policy there is a large measure of agreement with the emphasis on relations with France, Poland and the United States. But Washington should not expect an uncritical attitude by the new team in Berlin. The coalition agreement acknowledges the importance of good transatlantic relations but states clearly that differences should be discussed openly in a spirit of friendship and partnership. Europeans will be looking on anxiously to see whether the coalition can deliver because without reform in Germany the prospects elsewhere will remain bleak.

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