The World from Berlin Coalition Negotiations Marked by 'Chaos and Horse-Trading'

Inch by painful inch, Angela Merkel's coalition partners are moving closer to forming a government in Berlin, as the parties struggle to reconcile conflicting election pledges. Many newspapers on Friday accuse the parties of pandering to special interests rather than considering what is best for the country.
Coalition partners in a huddle in Berlin on Thursday evening.

Coalition partners in a huddle in Berlin on Thursday evening.

Foto: A3534 Hannibal Hanschke/ dpa

It has been a tortuous process but now, almost four weeks after elections put them in the driving seat to form a new government, Chancellor Angela Merkel's  conservatives and the pro-business Free Democrats (FDP) seem on the cusp of agreeing to a coalition deal this weekend.

The parties have struggled to reconcile very different election pledges to cut taxes on the one hand, while not imposing tough cuts on social spending on the other. All the time a new legal commitment to balancing the budget by 2016 has tied the negotiating partners' hands when it comes to increasing public borrowing to cover these seemingly incompatible promises.

Marathon talks into the early hours of Friday morning, however, saw the FDP move closer to clinching a deal with Merkel's Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). After 12 hours of talks Horst Seehofer, the CSU leader, told journalists at 1 a.m. that the parties had made progress towards an agreement ahead of Saturday's self-imposed deadline.

The parties have had to come up with compromises on a range of issues including nuclear energy, health care and taxation. Guido Westerwelle, leader of the FDP, had been sticking to his guns on demanding significant tax cuts of at least €20 billion ($30 billion), despite a swelling budget deficit as a result of the global financial crisis. Meanwhile, Merkel is loath to bring in any sweeping social spending cuts ahead of a crucial state election next year, as losing control of North-Rhine Westphalia would mean that the governing parties would not longer enjoy a majority in Germany's upper legislative chamber, the Bundesrat.

The parties had thought they had found a way to cover the gaps in funding for the Federal Labor Agency, which pays out Germany's unemployment benefit, and the state healthcare fund by creating a "shadow budget" that would allow them borrow the money for a special fund  that would not appear in the federal budget. However, in an embarrassing about-face they had to abandon that idea after legal experts warned that it could violate the constitution because of a recent amendment which obliges Berlin to cap public debt at 0.35 percent of gross domestic product starting in 2016. The government has to start reducing borrowing by as early as 2011 in order to achieve that goal.

On Friday the German press is largely unimpressed by the figure cut by the coalition partners in their negotiations. And many editorialists accuse the parties of pandering to their own clienteles rather than considering what is best for the country.

The center-left Süddeutsche Zeitung writes:

"It is completely understandable from a political standpoint that after 11 years in opposition the FDP doesn't simply want to administer the legacy of the grand coalition (the current right-left government comprised of Merkel's conservatives and the center-left Social Democrats), but rather its leaders want to make their own imprint on the government. There would be nothing at all to criticize here if the FDP's program (tax cuts) and the economic circumstances (financial crisis, budget misery) were in alignment. But they are not and so the liberals have drawn the very wilful conclusion, that it is not the FDP that must adjust itself to the world, but the world that must adjust itself to the FDP."

"The CDU will have to be careful not to be crushed by its coalition partners. Its credibility when it comes to the budget -- supposedly a core mark of the party -- has suffered hugely in recent days. And now its character as a catch-all party will be endangered if it relieves one part of society -- that is, taxpayers -- to the detriment of the whole of society in the form of increased charges."

The left-leaning Die Tageszeitung writes:

"Angela Merkel and Guido Westerwelle need a symbol for a clientele who are demanding lower non-wage labor costs and greater sustainability."

"Consensus politics is expensive. Employers, trade unions, doctors and patients -- the coalition doesn't want to alienate any of them, They are all supposed to keep their vested interests. Anyone on the other hand who doesn't have an official title in the budget, such as school children or migrants, is excluded by this kind of negotiating logic. The new government can argue about this budget, including with the labor unions. Yet they all share the same attitude and one that is conservative in the worst sense of the word."

The financial daily Handelsblatt writes:

"A day before the decisive round of talks, there are still many details that are being argued over. And that is strengthening the impression that the parties, in particular the FDP and the CSU, are fighting for their own clienteles."

"The party leaders should have made sure to delete all the little wishes that the policy experts and lobbyists wrangled into the coalition deal. Instead they have been more concerned with power struggles within their parties, and with which party gets which ministries."

"In the end CDU leader Merkel, FDP man Westerwelle and CSU boss Seehofer have been less concerned with a political new beginning than with their own special interests. The chancellor wants to save her state health fund. Westerwelle wants to save face with tax cuts, regardless of the costs. And Seehofer fears that his premature announcements such as the start of a tax reform in 2011 will blow up in his face."

"The party bosses are not giving enough attention to solutions that make political sense. Instead of clarity and coherence there is chaos and horse-trading."

The center-right Frankfurter Allgemeine Zeitung writes:

"The CDU and the FDP have obviously realized just in time that one does not base a new government on lies and deception. Only an open identification of the debts will create the necessary pressure and understanding for cost-cutting measures. There is no other way. The coalition partners shouldn't come before the people until they have come up with a way of balancing the expenditure side of the budget. That is the basis of a credible policy of growth. So far there is no coherent picture of the parties' tax plans emerging from the coalition talks. It seems that the CDU/CSU and the FDP plan to get rid of old privileges only to replace them with new ones. That is contradicts the noble claim to create a clear and fair taxation system."

-- Siobhán Dowling
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