| ANGELA MERKEL | German Chancellor |
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Turkey Must Meet A Series Of Stringent Criteria |
Angela MERKEL takes office as Germany's first woman chancellor with her government already under attack not only from central bankers and economists, who say it will need to do more to spur employment and growth, but from a German public dismayed at the prospect of higher taxes and what they'll be used for.
“It was promised that value-added tax would go up only to finance lower
social-security premiums, not the budget,” Peter LOESCHE, a professor of political science at Goettingen University, said in
an interview. Instead, he said, MERKEL's program is ”a package of measures that is being perceived by voters as swelling,
not lessening, their tax burden.” The final ARD television poll before the election showed more voters; 36 percent; wanted a grand coalition than any other outcome. Now, though, a Forsa poll of 1,008 voters on Nov. 14 for Stern magazine found only 27 percent describing the coalition's program as “good,” with 42 percent viewing it as “bad.” Forsa's weekly survey of voting intentions also found MERKEL's Christian Democrats dropping behind her Social Democratic coalition partners for the first time since before the previous election in September 2002.
The policy program signed largely retreated from MERKEL's campaign pledges to ease rules that dissuade companies from hiring and to cut the power of labor unions. Decisions on how to tackle the growing costs of Germany's health-care system were put off until next year. “Fundamental reforms in key areas have not yet been decided,” Bundesbank President Axel WEBER said in a Nov. 18 speech in Frankfurt. Changes to the way Germany's economy works “must remain on the political agenda,” WEBER said, in view of “persistently weak growth.'' MERKEL's government, the first grand coalition since 1969, plans next year to extend tax breaks for small companies, encourage the restoration of publicly and privately owned buildings and fund infrastructure projects through a 25 billion-euro ($29.5 billion) stimulus package. MERKEL and her ministers say they hope those measures will give some impetus to the economy before a planned increase in the value- added tax to 19 percent from 16 percent and cuts in subsidies are implemented in 2007. Those changes are aimed at helping Europe's largest economy meet the European Union's budget-deficit limit; 3 percent of gross domestic product; for the first time since 2001.
Germany's economy will grow only 0.8percent this year and 1 percent, in 2006, the government's panel of economic advisers said Nov. 9. With unemployment near a post-World War II record, companies including Deutsche Telekom AG and DaimlerChrysler AG are planning further job cuts, requiring swift action from MERKEL, whose inauguration today ends Social Democrat Chancellor Gerhard SCHROEDER's seven years in power. “The coalition agreement can only mark the start of things, not the end,” said Oskar NIEDERMAYER, a professor of political science at Berlin's Free University. “Greater reform measures must be taken on labor policy and health care.” As one sign of the coalition's fragility, the Christian Democrats and Social Democrats are sticking to separate proposals for health-care changes, with the CDU aiming to introduce uniform premiums to replace a system in which staff and employers contribute a variable percentage of gross monthly pay to health insurance; currently an average 14.2 percent.
Upgrading the System
Conversely, the Social Democrats want to upgrade the existing system by adding groups such as the self-employed and civil servants, presently excluded from mandatory contributions, to the pool of contributors. The head of the business-funded IW economic institute in Cologne, Michael HUETHER, called on MERKEL to act on the issue now. “ We need clarity on those issues relatively quickly, during the first and second quarters,” he said in a telephone interview. MERKEL, a physicist by training who grew up in East Germany, took over as Christian Democrat leader in April 2000 when the party was grappling with a financing scandal triggered by a breach of funding rules during Helmut KOHL's 16 years as chancellor from 1982 to 1998. She'll be Germany's youngest post-war head of government: KOHL, under whom she served eight years as a cabinet minister, was a year older when he took office.
A Return to the Polls.
MERKEL has only four months before some of Germany's voters will again be going to the polls. On March 26, 12.4 million people, a fifth of the 62 million-strong national electorate, will take part in regional elections in the states of Saxony-Anhalt, Baden- Wuerttemberg and Rhineland-Palatinate. MERKEL's tasks of bringing down the unemployment rate and reducing the deficit may be made harder should the European Central Bank raise interest rates from a six-decade low of 2 percent. The ECB should keep rates on hold “for as long as possible, ”MERKEL's designated finance minister, Peer STEINBRUECK, 58, said on Nov. 16, ECB President Jean-Claude TRICHET said the bank is ready “to moderately augment” the level of borrowing costs. MERKEL has already set herself a target for cutting the jobless total, which stood at 4.8 million last month. “If unemployment stays at 4.5 million or 4.7 million after four years of this coalition, then this coalition will not be viewed by people as a successful one,” she told a gathering of businessmen on Oct. 10. Her statement is reminiscent of one by her predecessor, SCHROEDER, when he was first elected in September 1998. “If we don't manage to lower the unemployment rate significantly, then we neither stand a chance of getting re-elected, nor will we be re-elected,” SCHROEDER said. When SCHROEDER lost office in September, the jobless rate was 11.7 percent, a full percentage point higher than seven years earlier.
TURKEY MUST MEET A SERIES OF STRINGENT CRITERIA
In attempt to echo preference for 'privileged relationship' between Brussels and Ankara, stopping short of full membership, MERKEL warns against overburdening ability of Union, which took in 10 mostly Eastern European states last year, to absorb more members.
New German Chancellor Angela MERKEL said that Turkey is not guaranteed entry in the European Union and that it must meet a series of stringent criteria.
MERKEL made the remarks during her first speech to the German Parliament to determine the new coalition government's foreign policy.
The membership negotiations that began on Oct. 3 “are a process with an open end and the outcome cannot be guaranteed in advance,” she said.
MERKEL told the Parliament that any country hoping to join the EU must fulfill all the conditions without restrictions.
If Turkey fails to meet those conditions or the EU is not ready to admit it, Turkey "must be bound as closely as possible to European structures in a way that further develops its privileged relationship to the EU,” she said.
The new German chancellor also pledged an “open and honest” dialogue with Islam but denounced forced marriages and so-called “honor” killings.
“A dialogue with Islam carries great significance; we have to learn to understand each other,” MERKEL told the Parliament.
“We will do this in an open and honest way. We will not brush aside differences, but name them clearly,” she added.
MERKEL stated that forced marriages and “honor” killings “have nothing, absolutely nothing, to do with honor and also no place whatsoever in our society. We cannot tolerate them.”
But she also stressed that “Germany is a tolerant and cosmopolitan country” and pledged to defend the rights of all minority groups.