GERMANY: After 100 days in power Chancellor Angela Merkel says sharing power with the political enemy is 'working out very well', writes Derek Scally in Berlin.
Chancellor Angela Merkel marked 100 days in power yesterday with an appeal to Germans "not to be afraid of change".
Dr Merkel used her traditional Ash Wednesday speech yesterday to signal she knows the political honeymoon is over, with looming strikes, three regional elections and an unemployment rate stuck at 12 per cent.
"We have to strengthen Germany's strengths . . . and be hopeful about change," said Dr Merkel yesterday, sounding like she was softening people up for a new round of reforms, but without revealing the details.
"If we in Germany decide to do nothing to change, then we will be left behind by other countries." Five months after voters forced her Christian Democrats (CDU) to enter a grand coalition with the Social Democrats (SPD), Dr Merkel said sharing power with the political enemy was "working out very well", even if she couldn't push through all the policies she would like.
But even more of a surprise than the political cohabitation has been Dr Merkel herself. Within weeks of taking office, she made financial concessions to save EU budget negotiations in Brussels, revived relations with the White House that had cooled over the Iraq war and downgraded to a "strategic partnership" the back-slapping relations Gerhard Schröder had cultivated with Russian president Vladimir Putin.
At home, the public mood has lightened considerably, with German managers confident about their future prospects like never before in the last 14 years and consumer confidence showing signs of rising. A recent poll showed that 74 per cent of Germans consider Chancellor Merkel a strong leader, and a majority are optimistic that the grand coalition can boost the economy after years of flat growth.
But economists point out that little has yet happened on pre-election promises to reform labour laws, simplify the tax system and, most importantly for job creation, cut non-wage costs. "We need to increase productivity and reduce non-wage costs to keep jobs here in Germany," said Prof Dennis Snower, president of the Kiel Institute for World Economics.
"The honeymoon period will soon come to an end and people will begin asking what the government has done at home." The government has agreed a €25 billion package of measures to promote growth, but there's a danger that growth could be dampened by a VAT hike in 2007. Other new measures will increase the retirement age to 67 and reduce young single social welfare recipients' entitlements.
But Guido Westerwelle, leader of the opposition Free Democrats, called the grand coalition a "lowest common denominator" administration.
There are signs Dr Merkel is employing her favoured strategy of downplaying what's possible to make any breakthroughs seem like considerable achievements, even if they are watered-down compromises with the SPD.
"We are interested in a politics that doesn't build up illusions, make false promises or busy itself with castles in the air, but do what we are convinced will become reality at the end," she said yesterday, repeating her grand coalition mantra of "many small steps instead of one big step".
But with the SPD rank and file starting to feel left in the shade of the CDU, party leader Matthias Platzeck adopted a more shrill tone yesterday.
"There won't be any cold market radicalism with us," he said, reminding supporters, and the CDU, that "our Germany economy isn't a gaming casino" for "immoral" managers.
The SPD, and the government, could soon face another problem if its ministers are called before a parliamentary inquiry investigating whether or not the last SPD-led government permitted German spies to work with the US while Berlin condemned the 2003 war in Iraq.