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          Merkel rivals to join German cabinet, talks start
          (Reuters)
          Updated: 2005-10-18 10:02

          A FINE LINE

          With rivals from the SPD and her own conservative ranks in the cabinet, Merkel will be walking a fine line as she tries to reconcile conflicting personal and policy objectives.

          Merkel's conservatives were forced into coalition talks with outgoing Chancellor Gerhard Schroeder's SPD after they failed to win enough support in last month's election to govern with their reform-minded allies, the Free Democrats (FDP).

          A combination of 16 pictures shows the new German Government named by coalition partners October 17, 2005. Christian Democrats (CDU and CSU) ministers (top row L-R) Chancellor, Angela Merkel; Economy and Technology, Edmund Stoiber; Interior, Wolfgang Schaeuble; Defence, Franz Josef Jung; Education and Research, Annette Schavan; Agriculture and Consumer Protection, Horst Seehofer; Family, Ursula von der Leyen; Chancellory, Thomas de Maizere. Social Democratic Party (SPD) ministers (bottom row L-R) Vice Chancellor and Labour, Franz Muentefering; Finance, Peer Steinbrueck; Foreign, Frank-Walter Steinmeier; Health, Ulla Schmidt; Environment, Sigmar Gabriel; Transport, Wolfgang Tiefensee; Justice, Brigitte Zypries; International Development, Heidemarie Wieczorek-Zeul.
          A combination of 16 pictures shows the new German Government named by coalition partners October 17, 2005. Christian Democrats (CDU and CSU) ministers (top row L-R) Chancellor, Angela Merkel; Economy and Technology, Edmund Stoiber; Interior, Wolfgang Schaeuble; Defence, Franz Josef Jung; Education and Research, Annette Schavan; Agriculture and Consumer Protection, Horst Seehofer; Family, Ursula von der Leyen; Chancellory, Thomas de Maizere. Social Democratic Party (SPD) ministers (bottom row L-R) Vice Chancellor and Labour, Franz Muentefering; Finance, Peer Steinbrueck; Foreign, Frank-Walter Steinmeier; Health, Ulla Schmidt; Environment, Sigmar Gabriel; Transport, Wolfgang Tiefensee; Justice, Brigitte Zypries; International Development, Heidemarie Wieczorek-Zeul.[Reuters]
          Formal talks between the CDU/CSU and the SPD began on Monday with a three-hour discussion aimed at securing consensus over the broad policy themes to be pursued by the new government.

          Top priorities will include bringing the budget deficit back within EU limits by 2007, addressing Germany's chronic unemployment problem and untangling the web of conflicting state and federal powers that have hampered past governments.

          "There was a good spirit to the discussion but that shouldn't conceal the fact that we will have very, very hard negotiations," Merkel told reporters after the meeting.

          Small groups of experts will meet this week to discuss individual policy areas before the next big meeting on October 24, but SPD leader Franz Muentefering, named as vice chancellor in the coalition, said one thing was already clear.

          German Chancellor-designate Angela Merkel calls the room to order with a bell prior a meeting of the Christian Democratic Union (CDU) parliamentary group at the parliament in Berlin.
          German Chancellor-designate Angela Merkel calls the room to order with a bell prior a meeting of the Christian Democratic Union (CDU) parliamentary group at the parliament in Berlin. [AFP]
          "There won't be any tax cuts. There's no room for that," he said. "That's a clear statement from both sides."

          In exchange for agreeing to let Merkel become chancellor, the SPD won the right to name eight of the 16 cabinet members, including the powerful finance, foreign and labor ministers.

          According to a paper drawn up by the SPD for the Monday talks, the federal government needs to find at least 14.5 billion euros in extra revenues or spending cuts in 2006, out of a total budget of about 250 billion euros, and 25 billion euros in 2007, to make its budget conform with European Union rules.

          In addition to Schaeuble, Stoiber and Seehofer, Franz Josef Jung, a top CDU politician in the state of Hesse, was nominated on Monday to become defense minister. Jung, 56, is close to Hesse Premier Roland Koch, another CDU rival of Merkel.


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