Good for Germany. Is anyone on this board German? Does anyone know if this will change German policy at all and to what extent? I sure many of the Europeans on this board know more than I do about her. How will this effect Germany's role in the EU?
Merkel to become German chancellor
Monday, October 10, 2005; Posted: 10:55 a.m. EDT (14:55 GMT)
Merkel at the start of a party executive meeting Monday
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Manage Alerts | What Is This? BERLIN, Germany (CNN) -- Conservative leader Angela Merkel says she will become Germany's first woman chancellor under a deal with Gerhard Schroeder's Social Democrats.
The deal, which ends Schroeder's seven years in office, breaks a three-week deadlock that started when voters gave Merkel's conservatives a narrow victory but not the majority needed to form a center-right government.
Instead, the two leaders' parties will form a "grand coalition" that bridges the country's right-left split.
Speaking at a news conference Monday, Merkel called the deal "good and fair" and said the parties agreed that "there is no alternative to a reform course" for Germany.
The two parties were "obliged to be successful," she said, expressing confidence she would find agreement on a common foreign policy with the Social Democrats.
She also said establishing good relations with the United States was "an important task."
"We have unanimously agreed that we will start coalition negotiations with the SPD aimed at creating a grand coalition," Merkel told reporters.
"The conservatives will occupy the chancellery. The conservatives and SPD will be represented equally in the Cabinet with ministers. That means it is not possible that the one outvotes the other."
Merkel said her party, the Christian Democrats, and their Bavarian sister party, the Christian Social Union, would have six seats in the new Cabinet in addition to the chancellery, with Schroeder's SPD getting eight seats.
Under the deal, the SPD would head the foreign, finance, labor, justice, health, transport, environment and development ministries, The Associated Press reported.
Merkel's CDU/CSU would get defense, interior, agriculture, families, education and economy. CSU head Edmund Stoiber would become economy minister.
Party leadership committees on both sides approved the deal Monday, officials said.
SPD leader Franz Muentefering said his party was committed to a stable government that could last the entire four years of parliament's term, AP reported.
The deal paves the way for detailed coalition talks and the formation of Germany's second "grand coalition" between its top two parties since World War II.
Muentefering said the deal was a "good basis" on which to finish important details such as who would occupy which Cabinet posts. He wouldn't say what specific role Schroeder would play other than help in the talks, AP reported.
Merkel said the major parties were aiming to complete coalition talks by November 12.
The deal must still be approved by party conferences and parliament once formal coalition negotiations are completed.
Until Monday, Schroeder's SPD had refused to relinquish its hold on the chancellery.
By securing many of the most important ministries in return for sacrificing Schroeder, the SPD was expected to force concessions from Merkel on economic policy, Reuters said.
Germany has been in political limbo since the September 18 election, and economists have warned that further delay could harm the struggling economy.
Financial markets were watching closely to see how much Merkel would have to dilute her reform plans to appease the SPD.
"Under the grand coalition agreement, some compromise will obviously have to take place for things to work," Ian Stannard, senior foreign exchange strategist at BNP Paribas, told Reuters.
"The reform mandate is probably not going to be as strong as it would have been under an outright victory by Merkel. But the fact that they have a coalition led by Merkel -- the market hope is that reform will to some extent be kept alive."
CNN's Chris Burns contributed to this report.
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