After twenty six days of negotiations and nearly two months after the general elections on 18th September last that did not result in a clear majority, the two main German political parties – the Christian Democrat Union (CDU-CSU) and the Social Democrat Party (SPD)- approved on 14th November a joint government 191 pages programme christened "Together for Germany with Courage and Dignity". For the second time since the Second World War (the first grand coalition was led by Chancellor Kurt Georg Kiesinger from 1966 to 1969), both major German parties will rule the country together under a grand coalition, "the only responsible perspective" according to Angela Merkel (CDU) who will lead this new team.

Apart from the Chancellor Angela Merkel the new government comprises, fifteen ministers, seven from the Social Democrat Party, five from the Christian Democrat Union and two from the Christian Social Union (CSU): Michael Glos in Economy Horst Seehofer in Agriculture and Consumer Protection. The team also includes six women, including three former social democrats members of Gerhard Schröder's government who will continue in their positions (Brigitte Zypries in Justice, Ulla Schmidt in Healthcare and Heidemarie Wieczorek-Zeul in Co-operation and Development). The two real surprises of this new government team are the appointments of Thomas de Maizière (CDU) as Chancellery Minister and that of Horst Seehofer (CSU) as Agriculture and Consumer Protection Minister along with Franz-Josef Jung (CDU) in Defence.

On 14th November the Christian Democrat Union voted widely in favour the grand coalition government programme. Out of the 116 delegates at the congress only three voted against it and one abstained. In Munich the CSU delegates voted unanimously in favour of the text written by the country's two main political parties. "We are in a dramatic situation. Germany is in deeply in debt. Only a grand coalition can remedy this" maintained CSU president Edmund Stoiber who for his part refused to enter government. Finally the SPD, which met in Karlsruhe also voted by a wide majority in favour of the government programme, only 25 of the 515 delegates present were against it.

It is better "to participate in a government with the strength that we have rather than remain in opposition without influence," declared Franz Müntefering, outgoing president of the SPD and future Vice Chancellor and Employment Minister in the new government. During their congress SPD delegates elected Matthias Platzeck as president of their party in place of Franz Müntefering, who had been rejected by an internal vote on 31st October. The new leader who maintains the presidency of the Land of Brandenburg won 99.4% of the vote (512 votes out of 515), an unprecedented result since the election of Kurt Schumacher in 1948. "This score reminds us of former times," said the new SPD president ironically. "But the result undoubtedly was achieved in an honest manner," he added.

The arrival of Angela Merkel in the Chancellery and the election of Matthias Platzeck as head of the SPD establish the advent of the "Ossis" generation, the name given by the West Germans to those from the East, to positions of power. The presidents of both of the main German political parties are the same age (51) and both trained as scientists (Angela Merkel is a physician and Matthias Platzeck is a specialist of biomedical cybernetics). Although the father of the Social Democrat president was a doctor his grandfather was a pastor like Angela Merkel's father.

After the fall of the Berlin Wall the new SPD leader spent a brief period with the Greens (he was elected in 1990 on the Alliance 90-Greens list during the elections of the last Parliament in the German Democratic Republic) before joining the SPD in 1994. Environment Minister for the Land of Brandenburg, he notably distinguished himself in 1997 for his management of the Oder floods which was both humane and efficient. In 1998, he became mayor of Potsdam and in 2002 replacing Manfred Stolpe, who had been appointed to Gerhard Schröder's government he became Minister President of Brandenburg, the Land which is at present led by a coalition allying the SPD and the CDU. Over the last few years Gerhard Schröder often offered Matthias Platzeck a position in his government; Angela Merkel also offered him the position of Vice Chancellor and Foreign Secretary in the grand coalition government just a few weeks ago. All of these offers were refused by Platzeck who until then had said that he was very happy in his role as "provincial politician". We should remember that in 2002 the former president of the Land of Brandenburg, Manfred Stolpe had said to Matthias Platzeck that he would "be federal Chancellor in ten years time at most."

"Together for Germany with Courage and Humanity": the grand coalition's government programme

The future government would like to consolidate the budget in order to achieve by 2007 the thresholds required by the Stability Pact that Germany has not respected for nearly four years. Economy and increases in taxes are the two main means chosen by Angela Merkel to achieve the principle objective she has established: achieving a minimum saving of 35 billion euro in 2007. Those who earn more than 250,000 euro per year will now be taxed 45% instead of 42% at present and the key measure of the CDU's electoral programme will be that VAT will rise from 16% to 19% on 1st January 2007. The additional revenue generated by these measures will go towards consolidating government finance and lowering social contributions.

The future grand coalition will also invest around 25 billion euro to boost growth and employment. By 2010 3% of the German GDP will be to be dedicated to research. A parental salary (established at 67% of the last salary with a ceiling of 1,800 euro monthly) will be created to enable parents who so wish to stop working to take care of their children. Finally the government will increase from 20 to 30 % the digressive allowance for companies before undertaking a more general reform of company taxation in 2008. In addition to this personal aid (home help, childcare and also some skilled work) might under certain circumstances be tax deductible, a step designed to fight against undeclared work. As far as employment is concerned the trial period for new employees will be extended from six months to two years in companies with less than fifteen employees. In addition to this the long term unemployed living in the East will have their monthly allowance harmonised with that provided in the West (i.e. 345 euro instead of the present 331).

We should note that the Greens and the Liberal Democrat Party (FDP) have mentioned that they might lodge a complaint against the unconstitutional nature of the budget planned for 2006. Indeed this plans for a deficit of 41 billion euro, therefore higher than investments planned at 23 billion euro, which is formally prohibited in the German Constitution.

The main criticism pointed at the government programme adopted by the two main parties says that the structural reform (reform of healthcare, consolidation of government finance) which everyone agrees has been long overdue in Germany are being left for the second half of the term in office. The future government wants to boost the economy before tackling deeper and more painful reform. The unions just as the management federations and a number of political analysts say they are extremely sceptical about the coalition's ability to finish its term in office.

"I know that the success of the grand coalition will be gauged over the next few years with regard to this issue : Has employment in Germany improved?" stressed Angela Merkel, echoing Gerhard Schröder who said in 1998 "If I do not manage to reduce unemployment, I do not deserve to be re-elected." Although the future government will be judged by the results achieved in terms of employment it will also be judged on its ability to provide its citizens with renewed confidence in political action. The two main parties have therefore put their differences –which are great- on hold and will privilege vital pragmatism in an agreement on a government programme that will enable them to avoid early general elections that neither the political community nor the German citizens want right now. All opinion polls show that since 18th September 80% of the population are against the organisation of more elections.

Angela Merkel has been elected Chancellor by the Bundestag on 22nd November. She is the first woman and the first person from the former GDR to take up this position. She is also the youngest Chancellor ever to rule the Federal Republic. Angela Merkel is to give her general policy speech at the end of November.

The sixteen members of the German government

Angela Merkel (CDU), Chancellor

Franz Müntefering (SPD), Vice Chancellor, Employment and Social Affairs Minister

Michael Glos (CSU), Economy Minister

Peter Steinbrück (SPD), Finance Minister

Wolfgang Schäuble (CDU), Home Secretary

Frank-Walter Steinmeier (SPD), Foreign Secretary

Franz-Josef Jung (CDU), Defence Minister

Brigitte Zypries (SPD), Justice Minister

Annette Schavan (CDU), Education, Training and Research Minister

Wolfgang Tiefensee (SPD), Transport Minister

Ulla Schmidt (SPD), Healthcare Minister

Ursula von der Leyen (CDU), Family Minister

Sigmar Gabriel (SPD), Environment Minister

Heidemarie Wieczorek-Zeul (SPD), Co-operation and Development Minister

Horst Seehofer (CSU), Agriculture and Consumer Protection Minister

Thomas de Maizière (CDU), Chancellery Minister