When Germany went to the polls at the end of September, a very comfortable majority of the conservative and liberal votes turned out for a new coalition government. Now, the coalition treaty was written in record time with many participants. The results published this weekend demand respect by all, even though some bickering by the opposition parties and unions is already starting. 

The main topic of the elections was economy, tax and future job creation. Neither nuclear power-related nor social themes won much attention. Now, the new coalition is trying to set the scheme for the next four years: with tax cuts for individuals and companies, growth and education. Together with the grand coalition’s decision to lower some tax, a total of €21bn in 2010 will be the initial step to further growth and consumption. Another €24bn annually is planned from 2011, with a large-scale tax reform initiating a step system instead of the current linear system in income tax. This is new and the actual percentage rates will remain to be calculated, however, promises set out before elections found their way into the coalition treaty. In addition, an important note is the extension of the life of already existing nuclear power plants. While the funding of the tax cuts is still open, there may be room for extra income through the prolongation of nuclear power as well as in indirect sources such as the highway fee for passenger cars - a similar system for trucks is already in place - to pay for infrastructure used by Germans and foreigners in transit.

While details still have to be negotiated and, although the electorate remains sceptical whether the coalition will keep the tax promises, so far it was an interesting start. And the new personnel is much younger than before: the youngest minister is Phillip Rösler (liberal FDP), whowas appointed health minister at the age of 36, followed by Karl-Theodor zu Guttenberg (conservative CSU), now defence minister at 37. His economics ministry is going to be held by Rainer Brüderle (liberal FDP), and the most important finance ministry goes to Wolfgang Schäuble (conservative CDU), the most experienced politician at 67. The outlook is good for Angela Merkel as chancellor. She will be at the forefront of the team once again, with Guido Westerwelle (liberal) at her side as foreign minister. Only the CSU may not be quite so happy as they took three jobs in the cabinet, but none of the most important economic or finance ministries.  Pragmatism seems to prevail – let’s hope it will remain that way in the foreseeable future.