A poor deal

10 October 2005 By Nina Koeppen

Germany’s conservative leader has had to yield the key labour and finance ministries as the price of taking the chancellorship from the SPD. The markets will be relieved the political paralysis is over for now. But it is clear that further labour market reform is off the agenda.

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After three weeks of paralysis, Germany's main political parties finally agreed on Angela Merkel to be the new chancellor. She will head a grand coalition of CDU/CSU and SDP. According to press reports, Gerhard Schroeder will not hold a position in the new government that is expected to take office in late November.

The SPD managed to secure eight top ministries, namely labour, finance, health, justice, foreign, environment, transport and development. The CDU/CSU is expected to steer the economics, defence, interior, agriculture, education and family ministries.

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