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27 Nov 2013
Details of the German coalition government deal
FXstreet.com (Barcelona) - After two months of negotiations following the reelection of Angela Merkel as German Chancellor, a deal has been reached to form a coalition government made up of the conservative bloc and the center-left.
The agreement between the Merkel's CDU and the Social Democrats includes an introduction of a national minimum wage of 8.50 euros an hour, which will come into force in 2015 and lowering of the retirement age to 63 years for people with a 45 year work span. It also brings changes to dual citizenship rules and stressess the need to boost Germany's and Eurozone's competitiveness.
“We want to strengthen entrepreneurship and the spirit of innovation and make them more respected,” the 180 page long accord stated in the introduction. “We will also improve the conditions for innovation and investment, especially for small and medium businesses.”
Furthermore, the pact pressed for a stronger European Parliament cooperating closely with national parliaments. It also suggested that Eurozone countries should individually handle the winding down of their own banks while ESM funds could only be granted if there was a risk for stabilty in the entire region and conditional upon the Bundestag's approval.
As far as environmental issues are concerned, the document reiterated the intention to abandon nuclear power in Germany by 2022 and to reduce greenhouse gas emissions by 201330. It also put emphasis on the expansion of renewable energy.
The “grand coalition” still requires an approval of the Social Democrats, who are expected to put the agreement to vote by mid-December.
Carsten Brzeski from ING comments: “It looks as if the new government’s focus is on redistributing the harvest of earlier economic reforms, rather than using the economic good times for new structural reforms, increasing the economy’s potential growth rate.”
The agreement between the Merkel's CDU and the Social Democrats includes an introduction of a national minimum wage of 8.50 euros an hour, which will come into force in 2015 and lowering of the retirement age to 63 years for people with a 45 year work span. It also brings changes to dual citizenship rules and stressess the need to boost Germany's and Eurozone's competitiveness.
“We want to strengthen entrepreneurship and the spirit of innovation and make them more respected,” the 180 page long accord stated in the introduction. “We will also improve the conditions for innovation and investment, especially for small and medium businesses.”
Furthermore, the pact pressed for a stronger European Parliament cooperating closely with national parliaments. It also suggested that Eurozone countries should individually handle the winding down of their own banks while ESM funds could only be granted if there was a risk for stabilty in the entire region and conditional upon the Bundestag's approval.
As far as environmental issues are concerned, the document reiterated the intention to abandon nuclear power in Germany by 2022 and to reduce greenhouse gas emissions by 201330. It also put emphasis on the expansion of renewable energy.
The “grand coalition” still requires an approval of the Social Democrats, who are expected to put the agreement to vote by mid-December.
Carsten Brzeski from ING comments: “It looks as if the new government’s focus is on redistributing the harvest of earlier economic reforms, rather than using the economic good times for new structural reforms, increasing the economy’s potential growth rate.”