FRANCE 24

German Chancellor Angela Merkel, whose conservatives on Sunday won enough votes to form a coalition with the pro-business Free Democrats, said on Monday at a news conference in Berlin that she hoped to use the new alliance to “guarantee jobs and create new ones to promote growth in a more decided manner”.

 
Merkel said the previous “grand coalition” with the left-leaning SPD did “good work”, but that this new partnership is “much more interesting” for “restarting the economy and growth”.

 
She also said she was committed to cutting taxes, but refused to say when.

 
"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," Merkel said.

 
Despite the apparent unity on many issues between Merkel’s party and the FDP, the chancellor’s vague tax reduction schedule underscores a seemingly trivial but ultimately important point of contention between the two parties. While Merkel has steadfastly refused to put a timeframe on her party's schedule for carrying out tax cuts, the FDP campaigned for quick cuts worth 35 billion euros.

FRANCE 24’s Berlin correspondent Damien McGuinness says an alliance of Merkel’s CDU/CSU party with the FDP, and the end of the uncomfortable “Grand Coalition” with the centre-left SPD, mean the Chancellor “has to put her money where her mouth is.” She has vowed to battle the financial crisis with a right-wing agenda of tax cuts, and now that she has a coalition partner in alignment with that agenda, “She can no longer blame anything on her coalition partner,” says McGuinness.

With Germany hit hard by the global recession, Merkel has acknowledged that she has a bulging in-tray waiting for her. The conservative leader said tackling unemployment – currently at 8.3 percent and forecast to rise – would be her "top priority."

One of her campaign pledges was to push for economic growth by tax cuts, particularly benefitting the middle classes. This was one of the areas where the FDP and the CSU/CDU were in agreement – and where the CSU and the SPD were not. In this sense, the marriage between the two right-of-centre parties seemed a harmonious one.

But the new coalition, just might be a case of having to be careful what one wishes for.

The FDP, led by hard-headed, dynamic leader Guido Westerwelle (who aims to become the country's first openly gay foreign minister), is perceived as being more pro-business than Merkel herself. In addition to its aggressive stance on tax reform, the party is widely expected to push for laws to make it easier for firms to hire and fire. The coalition is also likely to look for opportunities to shed state holdings in firms like rail operator Deutsche Bahn.

By Anne MAILLIET / Brice BOUSSOUAR / Damien McGuinness

Not everyone sees the new coalition as a beacon of hope for a dramatically improved Germany. The Financial Times Deutschland said on Monday’s online edition, "Anyone who expected or feared the chancellor will make a radical change of course with her new government is mistaken."

 
This was an election of many firsts, McGuinness points out. “The SPD (23%) got the lowest showing since German reunification, and the FDP got its highest (14.6%).”

 
Though it was enough to give its leader an unassailable lead, the 33.8 percent scored by the CDU was also its lowest share of the vote since1949.