The new German coalition

It is almost a month since the elections in Germany, and finally a coalition settlement has been reached between the CDU/CSU and the FDP.

Let’s take a look at what it will mean…

Tax reforms

Tax reforms worth €24bn have been promised (that’s British billions), although they will not happen until 2011.

My thoughts: no rush then to get those in, plenty of time for that to change

Income tax will be reformed, with a more “banded” type of system.

I’m sure I’ve heard that before.  I’m just not sure after which election…

VAT rates look to stay the same, but there will be some changes are to what qualifies for the reduced 7% rate.


Child benefit should be going up in 2010 to 184EUR per month for the first and second children, higher for others.

Well that’s something, it went up 10EUR this year, so another 20EUR will be nice, but bear in mind that despite inflation it has otherwise been stuck at 154EUR since the Euro was introduced in 2002!


No immediate changes are planned to the health system, but instead the coalition will wait for recommendations to be made by a Government committee.

Oh great!  So we’re stuck with the Gesundsheitsfond.  I guess there is no chance of paying less into it and the self-employed will still be at a disadvantage when it comes to sick pay.


Wolfgang Schäuble (CDU) moves from the interior ministry (sort of the Home Office) to the finance ministry (ie. the Treasury).

I find this a strange decision, but it could make a lot of people in the IT world happy.

Ursula von der Leyen (CDU) stays at the family ministry.

I’m sure that many in the IT industry would have liked to see her move as well – along with Herr Schäuble she was awarded the “Big Brother Award” this year because of her policies, which have often been criticised by IT specialists and journalists alike.

Karl-Theodor zu Guttenberg (CSU) moves from industry to defence.

I don’t get this one, because during the campaign and even after the election, I thought all the parties were “agreed” that he was the right man for the job his was in.  What happened?

Guido Westerwelle (FDP) will be foreign minister and vice-chancellor

No real surprise here.  The foreign minister is an important role in the German Government, and being vice-chancellor at the same time will probably give him the power to take decisions at high-level meetings without Frau Merkel.  Will she be spending more time in Germany now?

There are also many new ministers that I do not (yet) know much about, or even have an opinion on.

So is it good for Germany?

It’s too early to say.  With so many fresh faces in the cabinet I’m hoping that there will finally be some movement on issues that were just forgotten under the previous Government.  On the other hand, I have a feeling that the new one might just be taking things a little to relaxed, announcing plans now that will not come to fruition for another 15 months.

Or are they just taking things slowly to make sure they get new laws right the first time?

Anything is possible in German politics

… or so it would seem.  After the recent general elections (Bundestagswahl) we can expect to have a so-called “black and yellow coalition” in power.

The colours refer to the CDU and FDP parties, who are not actually so far apart in many of their policies, but still have a lot of debating to do until they agree on everything.

What worried me a little bit was a comment that I heard on the radio a few days ago, that “all topics are open to discussion”.  I would have expected that some topics did not need to be discussed, and it reminded me of the last round of coalition talks 4 years ago, where the CDU and SPD discussed raising the VAT rate.  One party wanted to raise it by 1%, the other did not want to raise it at all, and in the end they agreed on 3%!

Over the next few weeks the parties – including the CSU as well – will thrash out their policies and come up with a contract by which they will theoretically govern the country for the next 4 years.  I am wondering how much they will undo the work of the previous CDU/SPD coalition, and in particular how many policies will be agreed upon, that neither party had in their manifesto during the election campaign.

Scrapping the Gesundheitsfond would be a good start…

Truly German – Episode 05 – 2nd October 2009

Truly German is a podcast that talks about the news in Germany. Sometimes this will by national news, maybe political, but we will also be covering some local topics.

We want to have some fun at the same time, so part of the podcast is our Länderquiz – in which our contestant has to guess in which Bundesland three different news stories took place in.

Will Maria win herself a T-Shirt this week?

The topics are:

  1. Election results
  2. Döner reward for voters
  3. Hessen to relax smoking laws

The quiz covers the following stories:

  1. Manga fans meet up
  2. Diplomats gather at Schloss Horst
  3. The 356th Onion Market

Listen to the episode and contact us if you’d like to have a go yourself!

(Press the “play” button to listen to the podcast)

Download the MP3 file

Subscribe to the podcast

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