Merkel takes office as German chancellor

Angela Merkel took office as Germany’s eighth post-Second World War leader and its first female chancellor, heading an unwieldy alliance with the tough job of turning around Europe’s biggest economy after years of stagnation and six months of political turmoil.

The 51-year-old former scientist succeeded Gerhard Schroeder, whose government of Social Democrats and Greens was ousted by voters on September 18. MPs endorsed Merkel 397-202, though 51 members of her broad coalition did not vote for her.

As she ceremonially took over the imposing chancellery, across from the Reichstag parliament building, she said Germans were eager for the government to get to work after months of uncertainty.

“Expectations are very high among people in this country that problems get solved, policies made and decisions taken,” she said yesterday.

Turning to Schroeder, she said: “I would like to thank you for what you have done for our country,” citing the former chancellor’s efforts to trim the welfare state and boost the economy, and declaring that her government would build on the “milestones” he set.

Merkel must now coax action from an awkward coalition of her conservatives and Schroeder’s centre-left Social Democrats. The election results showed little support for action many economists say is needed to attack 11% unemployment and sluggish growth.

She also faces foreign policy challenges, such as nursing a recovering relationship with the US.

Merkel, head of the Christian Democratic Union, will begin her term – four years, if the coalition lasts – with visits to France today and Britain tomorrow, and one to Washington expected soon.

Merkel’s more pro-American outlook contrasts with Schroeder’s criticism of the war in Iraq. She also has suggested Berlin will place less emphasis on relations with Paris and Moscow, and says she viewed Europe as a partner, not a counterweight, to the US.

In a potential sign of trouble ahead at home, at least 51 members of Merkel’s 448-lawmaker coalition failed to vote for her yesterday.

She said that the “no” votes did not bother her. “My thoughts go back, eight weeks back, and I can only say, it’s an excellent outcome and a very solid foundation so that this government can successfully do its work.”

Merkel, typically reserved in public, broke into a smile after the vote was announced. Schroeder, who had clung to his demand to remain chancellor for three weeks after his party finished a close second in the election, was the first to walk over and congratulate her.

Merkel was sworn in later yesterday. The Protestant minister’s daughter, who grew up in officially atheist East Germany, added the optional words, “So help me God,” to her oath, a phrase Schroeder had left out.

She is the first chancellor to have grown up behind the Iron Curtain – until the fall of the Berlin Wall in 1989, the trained physicist was an unknown researcher at the East German Academy of Sciences.

But she rose quickly through the ranks of her party after the two Germanies were reunited in 1990, serving in the Cabinet of former conservative Chancellor Helmut Kohl.

Yesterday’s vote came exactly six months after Schroeder announced he was seeking national elections a year early, saying after a disastrous state election defeat that he no longer had a mandate for his reform efforts.

The inconclusive election forced Germany’s biggest parties into talks on a so-called grand coalition. Their main area of agreement was that Germany’s budget deficit must be brought within an EU-imposed limit by 2007.

That led them to agree on tax increases, including raising the top income tax rate from 42 to 45%, and raising value-added tax to 19 from 16% in 2007.

Economists and business leaders say Germany’s chief problem is the high cost of labour, particularly non-wage costs such as payroll taxes for unemployment insurance, pensions and old-age care.

To get into the chancellery, Merkel had to give away many of her campaign promises, including a proposal to cut back on the regional wage bargaining that unions prefer and many companies dislike. A pledge to cut top and bottom income tax rates also went overboard. And the Social Democrats won half the Cabinet posts, including foreign affairs and finance.

Still, the overwhelming feeling yesterday was one of relief.

“A lot of time has passed since May,” President Horst Koehler said as he formally appointed Merkel’s Cabinet. “It is good that Germany once again has a government that is capable of acting.”