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German politicians agree to form new government

(Agencies)
Updated: 2009-10-25 09:06

BERLIN: Chancellor Angela Merkel on Saturday finished building a new center-right government for Germany and announced an overhaul of the health care system, more help for families and annual tax cuts of up to euro24 billion.

Leader of the German Free Democrats (FDP) Guido Westerwelle (L) his party fellow Philipp Roesler and German Chancellor and head of the conservative Christian Democratic Union (CDU) Angela Merkel chat before coalition talks in Berlin, October 23, 2009. [Agencies]

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Merkel said the coalition of her Christian Democrats, their Bavarian sister party the Christian Social Union and the pro-business Free Democrats are capable of solving the country's problems following their victory in last month's parliamentary elections.

Guido Westerwelle, the leader of the Free Democrats, said at a joint news conference with Merkel that he wants all nuclear weapons to be pulled out of Germany - an issue that may prove vexing to the country's NATO allies, including the United States. Merkel made no immediate pledge on that issue.

The coalition agreement is expected to be approved and signed on Monday.

The chancellor announced some new members of her new cabinet, while Westerwelle confirmed the Free Democrats' ministers later on Saturday.

Westerwelle himself will take over the posts of foreign minister and vice chancellor, as widely expected.

The Health Ministry will go to the youngest minister in the Cabinet, 36-year-old Philipp Roesler of the Free Democrats.

The new Economics Minister will be Rainer Bruedele, Sabine Leutheusser-Schnarrenberger will be in charge of the Justice Ministry and Dirk Niebel will head the Ministry for Development. All three are members of the Free Democrats.

Merkel had said earlier on Saturday that current Economy Minister Karl-Theodor zu Guttenberg will become the defense minister tasked with handling Germany's unpopular mission in Afghanistan. He replaces Franz Josef Jung, who is to take over at the Labor Ministry.

Germany's veteran interior minister, Wolfgang Schaeuble, was expected to take the key position of finance minister, a move that would put the 67-year-old member of Merkel's party in charge of tending Germany's strained budget as her new government tries to balance tax cuts and fiscal discipline.

Ahead of the September 27 elections, both parties advocated tax cuts in an effort to spur economic growth. However, they differed on how far to go at a time when efforts to combat the economic crisis have pushed up debt.

A cornerstone of the coalition agreement is reform to the nation's health care system. It is expected to include a freeze on employers' contributions, meaning individuals will carry the burden of any cost increases.

Child benefits and tax write-offs for families with children are to be increased in 2010, making good on an election promise by the Free Democrats to ease the burden on families.

During the Cold War, the United States based nuclear weapons in Germany as part of its deterrent against Warsaw Pact forces. Since the Berlin Wall came down in November 1989, it has removed 95 percent of those weapons.

The US has not said how many nuclear weapons are still in Germany.