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Germany gets new governement

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  • Germany gets new governement

    Two months after Germanys federal elections, when Angela Merkels conservative bloc was scratching at the absolute majority of votes, but didnt get it, a deal with the main center left party, the Social Democrats (SPD) has been announced complete. Merkels last (conservative/libertarian) governement has been acting on a caretaker base since September. The new governement ( Merkel Nr. 3) will be made up of the main center-right Christian Democrats (CDU), the bavarian separatists/autonomists CSU ( that form a bloc with Merkel in parliament) and the Social Democrats (SPD), who have already shared in Merkels governement Nr.1 from 2005-009. The Social Democrats appear to have won concessions on numerous social issues, like the introduction of a nationwide minimum wage ( which Germany only has by branch and region so far, with dumping wages that require additional public assistance in parts of the service sector). The minimum wage will be set by a commission of unions and employers associations representatives and annually adapted, NOT by the governement. Citizenship rules will be reformed ( which will make it easier for immigrants to become naturalized Germans), and investions in education, science and research heavily hiked.
    MORE important though will be something else : The parties agree to run NO new governement debt from 2015 (budget is in surplus anyway) and no tax increases. That means the recent calls by the Obama administration to increase spending have fallen on deaf ears ( which was predictable). On fiscal policies there is contrary to some international commentaries not that much that separates CDU and SPD (the Social Democrats have ALWAYS voted with Merkel on measures like the Euro rescue and the chancellors SPD challenger this year, Peer Steinbrck, was finance minister under her from 2005-009). On the international arena no major changes are to be expected either, although some observers occasionally bring up Merkels predecessor Schrders (an SPD man) ties with Russia (he is now something like the chief lobbyist of russian oil and gas in Germany). It has also been noted that the SPD was pushing for a much harder reaction to NSA spying on Germany and Germans than the cautious Merkel. But wether that will affect actual policy is a completely different question.
    The Social Democrats will still hold a membership ballot, but contrary to what the Guardian says here, a "no" is pretty unlikely if the perspective is to once again share power :


    Angela Merkel forms Germany coalition | World news | theguardian.com
    Last edited by Voland; 11-27-2013, 01:38 AM.

  • #2
    Re: Germany gets new governement

    Gotta love that new government smell...

    So, by the sound of it, everyone basically decides whats going to happen in advance, and the year to years stuff is basically rubber stamped.

    ?


    • #3
      Re: Germany gets new governement

      Originally posted by Commodore View Post
      Gotta love that new government smell...

      So, by the sound of it, everyone basically decides whats going to happen in advance, and the year to years stuff is basically rubber stamped.


      Well, I understand that many Americans are not familiar with coalition governements between various parties, like in countries with proportional political representation. In Germany they are the norm, since its (proportional) post-war electoral system sought to avoid possibilities to concentrate power easily in one position (for obvious historical reasons). Each governement since 1949 has been a coalition governement, of two or three parties.
      Coalition contracts/treaties serve to clear the rules of the game, especially if parties have campaigned against each other before sitting down together to form a governement. Like this time. Coalitions arent love marriages, they are political math and interpretation how to handle the sovereigns (the voters) will. And that explains why it is of crucial importance to document what the parties concerned can agree on and which projects they want to push. Like no new governement debt from 2015 ( imagine that in the US ) It is clear in advance that noone can get 100 %, but that is also the idea of coalition governements. Parties are rivals, but for a power perspective they also have to able to compromise ( which avoids deadlocks as we have seen in the US over the governement shutdown) and if skillfully managed coalitions can be pretty stable (only two times in sixty-four years governements have fallen apart prematurely) :

      http://www.nytimes.com/2013/11/28/wo...ment.html?_r=0

      ?


      • #4
        Re: Germany gets new governement

        Probably all good news for Germany. If they can reach agreement on coalition and agree on spending terms that keep taxes as is and spending in surplus mode then Germany is lightyears ahead of what the US can achieve.

        ?


        • #5
          Re: Germany gets new governement

          Originally posted by Voland View Post
          Well, I understand that many Americans are not familiar with coalition government between various parties, like in countries with proportional political representation. In Germany they are the norm, since its (proportional) post-war electoral system sought to avoid possibilities to concentrate power easily in one position (for obvious historical reasons). Each government since 1949 has been a coalition government, of two or three parties.
          Coalition contracts/treaties serve to clear the rules of the game, especially if parties have campaigned against each other before sitting down together to form a government. Like this time. Coalitions arent love marriages, they are political math and interpretation how to handle the sovereigns (the voters) will. And that explains why it is of crucial importance to document what the parties concerned can agree on and which projects they want to push. Like no new government debt from 2015 ( imagine that in the US ) It is clear in advance that no one can get 100 %, but that is also the idea of coalition governments. Parties are rivals, but for a power perspective they also have to able to compromise ( which avoids deadlocks as we have seen in the US over the government shutdown) and if skillfully managed coalitions can be pretty stable (only two times in sixty-four years governments have fallen apart prematurely) :

          http://www.nytimes.com/2013/11/28/wo...ment.html?_r=0
          Yeah, a balanced budget would be a great thing. I don't think it's been done on principle in American since the days of Calvin Coolidge, and only since because the opposing party with the power of the purse prevented the President from spending more.

          We have far more of a parliamentary system than we get credit for and the Founders intended. Between the Vanilla Democrats and the Socialists, and the Establishment Republicans and the Tea Party Conservatives, governing really doesn't happen when each "party" truly represents its constituents. Previously, governing majorities where coalitions of these various wings of the major parties. Ultimately I think it's the "political math" that draws people away from actual principles and causes these kinds of inter-party schisms. People trying to govern on principle will grow to despise those seeking to win solely for the sake of wielding power.

          It just goes to show that the best government is self government, and the more of that sovereignty we outsource to the politicians, the uglier the fights are going to get.

          ?


          • #6
            Re: Germany gets new governement

            Originally posted by Sluggo View Post
            Probably all good news for Germany. If they can reach agreement on coalition and agree on spending terms that keep taxes as is and spending in surplus mode then Germany is lightyears ahead of what the US can achieve.

            Well, budget has been in surplus for years now, driven not only by booming exports (highest trade surplus in the world, bigger than Chinas), but also rising domestic consumption in response to rising wages and historically low unemployment ( something that the Obama administration in its recent devastating critique of Germanys economic model has left out) :

            U.S. Treasury Blasts Germany's Economic Policies - WSJ.com


            [FONT=Arial Black]Employing unusually sharp language, the U.S. on Wednesday openly criticized Germany's economic policies and blamed the euro-zone powerhouse for dragging down its neighbors and the rest of the global economy.

            In its semiannual currency report, the Treasury Department identified Germany's export-led growth model as a major factor responsible for the 17-nation currency bloc's weak recovery. The U.S. identified Germany ahead of its traditional target, China, and the most-recent perceived problem country, Japan, in the "key findings" section of the report.

            The U.S. is itself dealing with persistently weak growth and has faced complaints from some countries about its attempts at reviving a sluggish economy, including the Federal Reserve's easy money policies. Finance leaders have also taken aim at the U.S. over the global economic impact of fiscal wrangling between the White House and Congress, including the government shutdown and debt-ceiling fight.
            With the latest report, the Treasury Department has now criticized the world's three largest economies after the U.S. for their economic policies.

            The focus on Germany represents a stark shift in the Obama administration's economic engagement with one of its most important allies


            To which the Germans have blasted right back :

            Germany Hits Back at U.S. Over Economic Criticism - WSJ.com

            Germany rejected Washington's criticism of the country's export-focused economic policies as "incomprehensible," as tensions between the longtime allies escalated.

            Responding to a pointed critique of Berlin's economic course by the U.S. Treasury, German officials said the global appetite for German cars and machinery was driven by market factors and nothing else.

            "The trade surpluses reflect the strong competitiveness of the German economy and the international demand for quality products from Germany," the Economics Ministry said.

            In Washington, U.S. officials held firm to a position outlined in a report published late Wednesday accusing Germany of dragging down its neighbors and the rest of the global economy by consuming too little while running significant surpluses with many of its key trading partners....."The U.S. government should critically analyze its own economic situation," said Michael Meister, a senior lawmaker and close ally of Chancellor Angela Merkel. He criticized the high U.S. debt level, which he said "doesn't just unsettle [the U.S.], but has negative effects on the global economy."
            His remarks were echoed by Gerhard Schick, finance spokesman for the opposition Greens, who said Germany's willingness "to take advice from Washington has decreased massively after the U.S. government shutdown put the entire financial system at jeopardy."
            A senior Treasury official insisted that the timing of the report had nothing to do with international politics.



            US Blasts Germany's Economic Model; Germany Blasts Right Back... And May Use Snowden As Leverage | Zero Hedge

            What they are now aiming at with the new coalition is a budget that is also structurally balanced, underpinned by a "debt brake" written into the constitution ( that only allows the governement a deficit of about 0,65 % of GDP annually unless in truly extraordinary circumstances, such as wars, major catastrophies etc.). Which will earn the Germans more bashing from anglophone "keynesian" economists, but underlines that the country continues to dance to a different tune and a different economic and growth model. :


            German Parties Agree on Financial Issues But No Deal on Spending - WSJ.com


            The next government aims to have a structurally balanced budget from 2014 and will do without any new debt from 2015. It also wants to reduce Germany's debt ratio, which was at 81.9% of gross domestic product in 2012, to below 70% by the end of 2017 and to below 60% within a decade.

            "We are aware of our responsibility that Germany has to live up to its role in Europe with a solid and sustainable financial and budget policy," the document said. "Germany is required to contribute to the euro-zone's stability with a stability and growth orientated budget and fiscal policy."



            While there is no doubt that they could ( and that they have broad public backing), wether they manage that is a different question of course

            ?


            • #7
              Re: Germany gets new governement

              Far as I am concerned the US is in no position to criticize any other nation's economy, government economic policy, fiscal condition, debt position, or monetary policy. You look at any of those five areas objectively, the US is a clear failure.

              ?


              • #8
                Re: Germany gets new governement

                Kudos to you. You have my deepest respect on that one.

                The OP is dead on that few Americans understand minority or coalition governments. When the governing party must compromise on its ideologically driven goals, the electorate always wins. Canada's minority governments have produced some of the best legislation in the nation's counry and is a far better way of doing things than the constant stand offs and government shut downs of the US system.

                This, I would suggest is reflective of the German culture, practical, planned and efficient in its way. It is amusing that the "moderate' socialists held out for the concession of a national minimum wage. If there was an issue that meant nothing it is that, especially in the Euro Zone...

                ?


                • #9
                  Re: Germany gets new governement

                  Originally posted by Voland View Post
                  Two months after Germanys federal elections, when Angela Merkels conservative bloc was scratching at the absolute majority of votes, but didnt get it, a deal with the main center left party, the Social Democrats (SPD) has been announced complete. Merkels last (conservative/libertarian) governement has been acting on a caretaker base since September. The new governement ( Merkel Nr. 3) will be made up of the main center-right Christian Democrats (CDU), the bavarian separatists/autonomists CSU ( that form a bloc with Merkel in parliament) and the Social Democrats (SPD), who have already shared in Merkels governement Nr.1 from 2005-009. The Social Democrats appear to have won concessions on numerous social issues, like the introduction of a nationwide minimum wage ( which Germany only has by branch and region so far, with dumping wages that require additional public assistance in parts of the service sector). The minimum wage will be set by a commission of unions and employers associations representatives and annually adapted, NOT by the governement. Citizenship rules will be reformed ( which will make it easier for immigrants to become naturalized Germans), and investions in education, science and research heavily hiked.
                  MORE important though will be something else : The parties agree to run NO new governement debt from 2015 (budget is in surplus anyway) and no tax increases. That means the recent calls by the Obama administration to increase spending have fallen on deaf ears ( which was predictable). On fiscal policies there is contrary to some international commentaries not that much that separates CDU and SPD (the Social Democrats have ALWAYS voted with Merkel on measures like the Euro rescue and the chancellors SPD challenger this year, Peer Steinbrck, was finance minister under her from 2005-009). On the international arena no major changes are to be expected either, although some observers occasionally bring up Merkels predecessor Schrders (an SPD man) ties with Russia (he is now something like the chief lobbyist of russian oil and gas in Germany). It has also been noted that the SPD was pushing for a much harder reaction to NSA spying on Germany and Germans than the cautious Merkel. But wether that will affect actual policy is a completely different question.
                  The Social Democrats will still hold a membership ballot, but contrary to what the Guardian says here, a "no" is pretty unlikely if the perspective is to once again share power :


                  Angela Merkel forms Germany coalition | World news | theguardian.com
                  I have not seen anything on the SPD stance vis a vis the US. I recall that Merkel campaigned heavily on a close association and friendship with the US and got burned on the spying scandal.

                  How will the SPD affect that situation if at all?

                  ?


                  • #10
                    Re: Germany gets new governement

                    Originally posted by FearandLoathing View Post
                    Kudos to you. You have my deepest respect on that one.

                    The OP is dead on that few Americans understand minority or coalition governments. When the governing party must compromise on its ideologically driven goals, the electorate always wins. Canada's minority governments have produced some of the best legislation in the nation's counry and is a far better way of doing things than the constant stand offs and government shut downs of the US system.

                    This, I would suggest is reflective of the German culture, practical, planned and efficient in its way. It is amusing that the "moderate' socialists held out for the concession of a national minimum wage. If there was an issue that meant nothing it is that, especially in the Euro Zone...
                    Coalition governments can be brilliant when looking to the real goal of that government type, but there are also times in which I'd question the result. Japan every so often, India all the time.

                    That being said Germany has figured out a way to navigate the waters with far greater economic, fiscal, and general policy success. If there is a nation interested in the long term outlook and viability of the Euro, it is Germany. I'll admit I do not view German news as much as other nations but what I do see is far less contentious and self destructing as US politics usually is.

                    ?


                    • #11
                      Re: Germany gets new governement

                      Originally posted by FearandLoathing View Post
                      I have not seen anything on the SPD stance vis a vis the US. I recall that Merkel campaigned heavily on a close association and friendship with the US and got burned on the spying scandal.

                      How will the SPD affect that situation if at all?
                      Well, the US were not that important during the campaign (most important by far was the economy), since both major parties, CDU (Conservatives), SPD (Social Democrats) essentially agree that close relations with the US are in Germanys best interest at least in principle. What they were struggling with was how to reconsile the spying scandal with that goal. While Merkel was/is rather cautious and polite in tone ( which after two terms should be clear doesnt mean being hesitant, the lady has actually already demonstrated that she can be quite rough while smiling), the SPD was demanding a more non-compromising and confrontative course, also in rethoric. But that is obviously the privilege of the opposition. Chancellor candidate Steinbrck was calling for freezing transatlantic free trade talks ( that Obama has declared one of his priorities), scrapping data sharing agreements with the US and taking counter-intelligence measures already prior to the Merkel phone hacking scandal. But that was clearly not what decided the election. Germans were outraged, but not outraged enough to shoot themselves in the foot as a trading nation. Especially the export industry was not at all supportive of measures like walking out of trade talks in response to NSA spying. And the message that in the end also german workers would pay the price if trade ( or intelligence) relations were used as an instrument of payback has also trickled through to german voters (as Merkel has continously been saying), that overall prefer the chancellors non-emotional, long-term oriented and highly pragmatic style of politics (almost every second German voted for her).
                      Merkel still got "burned" in the "phone hacking" scandal, but more for the embarassement of Obama publicly lying to her than the espionage as such. And the exposed spy hub in the US embassy in Berlin. That will inevitably have political consequences, but they will only become visible in the long run. Also since the foreign ministry will most likely be taken by the Social Democrats. This erosion of trust between the capitals will most likely not be seen so much in emotional posturing and mighty declarations, since that is not the german way. And that is also why many American might be tempted not to pay attention. But for example in the fine print of transatlantic summits. And in what both leaders get accomplished in terms of the global economy and global security. Everybody may guess wether Germany will now be more or less favourable to US policy goals. And that is probably worse.
                      Last edited by Voland; 12-03-2013, 01:05 AM.

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                      • #12
                        Re: Germany gets new governement

                        Originally posted by FearandLoathing View Post
                        The OP is dead on that few Americans understand minority or coalition governments. When the governing party must compromise on its ideologically driven goals, the electorate always wins. Canada's minority governments have produced some of the best legislation in the nation's counry and is a far better way of doing things than the constant stand offs and government shut downs of the US system.

                        This, I would suggest is reflective of the German culture, practical, planned and efficient in its way. It is amusing that the "moderate' socialists held out for the concession of a national minimum wage. If there was an issue that meant nothing it is that, especially in the Euro Zone...
                        1. Merkel could have run a minority governement pretty easily, though it would have been the first time in post-war Germany. Only a couple of seats were separating her bloc from the absolute majority of votes, and these could have been collected among centrist Social Democrats and Greens in the consensus-oriented german parliament on a case by case base. Even the majority of SPD voters, especially women, said they prefferred her as chancellor over their own candidate Peer Steinbrck in a poll after all. But Merkel chose to play it safe. And that appears to be in line with the polls.

                        2. The minimum wage was indeed almost irrelevant in terms of the Eurozone. Since even the worst paid jobs in the export industries are considerably above the discussed minimum wage ( that means the often heard claim that Germany was "depressing" or "holding down" wages to gain an export advantage is pretty easily exposable as nonsense). Where dumping wages exist in Germany is largely in the domestic service industry, jobs like hairdressers, waiters or cleaners etc. who often need additional public assistance to make ends meet. And these are often in competition with eastern Europeans, like Poles or Romanians, that work for a handful of Euros, and often even illegally. The SPD argues not totally without justification that companies who only "create" jobs that require additional subsidies by the taxpayer should better vanish from the market. And the minimum wage part in the coalition treaty was quite clearly the SPDs demonstration not to have dropped all their key demands on the road back to power. The implementation of the minimum wage is typically german though : It will be set by a commission of company and union representatives, NOT the governement, annually adapted, differences by region (East-West) are apparently possible, and in a couple of years it will be up for review apparently. The bottom line that the SPD sets is at 8,50 Euros an hour.

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                        • #13
                          Re: Germany gets new governement

                          Almost exactly three months after the federal elections, Germanys parliament will officially elect chancellor Merkel for a third term and the new governement will be sworn in today. On Saturday, a members poll among the center left Social Democrats revealed a huge majority in favour of joining Merkels third governement.
                          The new governement largely signals continuity, but also reveals a few surprises. Those critics abroad that consistently demand changes to Germanys way of doing finances and economics ( like the Obama administration) will be dissappointed though. Since Merkels point man during the Eurocrisis, Wolfgang Schuble, remains in the powerful finance ministry ( and has already publicly ruled out major re-adjustments).
                          Deputy chancellor and minister for economics and energy will be the Social Democrats chairman, Sigmar Gabriel. Gabriel is considered to lean to the left of his party, but also to be capable of pragmatism. He has served as environmental minister under Merkels first governement and has his main base in social (minimum wage) and ecological (like managing Germanys nuclear phase out and switch to renewable energy) issues. His appointment may signal a more domestic policy agenda for the years ahead after a hyperactive focus on Euro and international topics during Merkels second term.
                          Also the foreign ministry will be taken by the Social Democrats. Frank -Walter Steinmeier has served as chancellor Schrders chief of staff (also during the Iraq war) and as Merkels first foreign minister from 2005-009. Steinmeier is considered to be an efficient, non-charismatic technocrat. And a much less enthusiastic "transatlantist" than outgoing foreign minister Guido Westerwelle. He has also used quite colourful vocabulary during the NSA scandal, and if rebuilding relations with the US again was a priority of the new governement, than other appointments would have been thinkable. But surprises are possible of course.
                          Interesting is that the NSA scandal apparently has consequences. Hardline interior minister Hans-Peter Friedrich, of the bavarian CSU party, that many accuse to have screwed up during the NSA scandal ( he has for example declared the NSA spy affair to be over BEFORE the Merkel phone hack was exposed and publicly prided himself on his good personal contacts with the NSA) will be responsible for agriculture from now on, which is hardly a promotion . And the ministry will loose responsibility for the secret services. That will now be concentrated in the chancellery, on top of a remarkable budget increase. Merkels incumbent chief of staff, who was supposed to play at least a supervising role of intelligence, and had also declared the NSA affair to be over prematurely, will leave his office.
                          The defence ministry will not only for the first time be headed by a woman, Ursula von der Leyen ( a mother of seven by the way !). Von der Leyen (of Merkels conservatives), who has also already served as Social affairs and as Labour minister, is widely regarded as a possible crown prince. If she succeeds again at the job, than she might lead the Christian Conservatives in the 2017 election battle, which means that her name should be remembered.
                          And then the new governement will also have the first federal minister with turkish roots, Aydan zoguz .......

                          New Government Takes Shape in Berlin - SPIEGEL ONLINE


                          http://www.washingtonpost.com/world/...c97_story.html
                          Last edited by Voland; 12-17-2013, 02:20 AM.

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