Merkel party OKs new German govt, despite concerns

AP News
Posted: Dec 09, 2013 9:43 AM
Merkel party OKs new German govt, despite concerns

BERLIN (AP) — Chancellor Angela Merkel's conservative party on Monday backed a deal to form a new German government with its center-left rivals, putting aside concerns over concessions that include a national minimum wage and a move to make it easier for some people to retire early.

Merkel told a conference of her Christian Democratic Union "there is a good chance that Germany and people in Germany will be doing better in 2017 than today" under the agreement.

She noted that the coalition deal features, as her party demanded, no tax increases, an end to new borrowing and continuity in Berlin's hard-nosed approach to Europe's debt crisis. But she conceded that there were also difficult compromises.

Merkel's party emerged from the Sept. 22 parliamentary elections with its best result in two decades. However, she had to reach across the aisle because they fell a few seats short of an absolute majority and their previous coalition partners were voted out of parliament.

In what has become the longest effort to form a government in post-World War II Germany, Merkel negotiated with the center-left Social Democrats to form a "grand coalition" of the country's biggest parties.

The Social Democrats, who finished a distant second at the polls, extracted concessions that include Germany's first mandatory national minimum wage of 8.50 euros ($11.65) per hour and a change to the pension system that will allow some longtime workers to retire at 63 on full pensions.

Some delegates at Monday's conference criticized that as too much of a departure from Germany's decision under Merkel to raise the retirement age gradually from 65 to 67.

"I fear that we are sending the wrong signal," said Philipp Missfelder, the head of her party's youth wing. Kurt Lauk, a prominent figure on the CDU's pro-business right, noted that Germany has often held up its own labor-market reforms as an example to struggling European countries "and now we of all people are rolling back part of them."

Still, delegates voted near-unanimously to back the deal, with only two of about 180 abstaining.

The coalition deal still faces one obstacle: the Social Democrats, who emerged weakened from a previous "grand coalition" with Merkel between 2005 and 2009, are putting the deal to a ballot of their entire 470,000-strong membership. The result is expected this weekend.

Assuming the accord is approved, Merkel is expected to be elected by parliament for a third four-year term on Dec. 17.