Merkel Does Her Conservative Business and Angers the Left

In the weeks leading up to this year’s presidential campaign in Germany, Angela Merkel refused to say much about what policies she would implement if re-elected. But less than a month after her victory, she’s forged full steam ahead and sealed a coalition deal that will cut taxes – a move that shows the ease with which Merkel can push a more conservative agenda through as a result of Germany’s new center-right government.

The deal marks the jumpstart of a coalition between Merkel’s Christian Democratic Union (CDU) and the pro-business Free Democratic Party (FDP), a union of which will take office next week and officially form Germany’s new center-right government. The new coalition ushers out the “grand coalition,” which had been a relatively problematic governmental alliance between Merkel’s CDU and the socialist Social Democratic Party. The member parties of the alliance shares policy goals, making the implementation of new laws a much faster process.

The deal struck in the wee hours of this morning accomplished one of the FDP’s primary objectives and will cut income taxes nationwide by 36 billion dollars starting in 2011. In addition to easing the taxes on families with children, the reform will loosen the corporate and inheritance taxes. Of course, this news is met with the dismay of Frank-Walter Steinmeier, head of the Social Democrats’ parliamentary group and Merkel’s opposition in this year’s elections.

“Nothing will get better, but there will be less security and things will get a lot more expensive,” Steinmeier said. “This coalition will widen the social divisions in this country instead of fighting them.” But it’s doubtful that anyone will take Steinmeier’s word as anything but sour grapes just weeks after his loss to Merkel.