Social Democrats and Christian Democrats signed the coalition treaty Friday after weeks of negotiation. But infighting on one of their biggest proposals could pose trouble before work really begins.
Merkel and others have sealed the coalition treaty with their signatures
During the month-long talks on the grand coalition treaty, negotiators from both camps had agreed that it would be impossible for the new government to present a draft budget for 2006 that would meet Germany's constitutional requirements.
Fresh borrowing is not permitted to exceed the total volume of public investment, according to the the constitution. But negotiators said they will be forced to present a budget that foresees around 41 billion euros ($47.8 billion) in new debt, but only 23 billion euros in public investment.
Fearing that president Host Köhler will not sign such a budget into law, Social Democrat leaders want to make use of a loophole. Under the Constitution, it is possible for the state to borrow more than it invests if the economy is in trouble. With sluggish consumer demand and high unemployment, that won't be a difficult case to make.
Objectio n s a n d bickeri n g
But the conservative CSU, the Bavarian sister party of Angela Merkel's Christian Democrats, have objected to the plan. Party general secretary Markus Söder said the new government should stop trying to fudge the issue and admit that 2006 budget will be unconstitutional under German law.
The coalition agreement
"The budget situation is so dramatic that we can no longer resort to the dirty financial tricks employed over the past few years," he said.
Söder has made a plea for clarity.
"Why not tell people what the situation really is," he said. "We could only save more than we are doing at the moment, by reducing pensions and benefits for families, and this is something that nobody wants to be responsible for."
Co n servatives to blame for budget mess
Finance minister-designate, Peer Steinbrück (SPD), said the conservatives should refrain from blaming the SPD and the former Schroeder government for gaps in the budget.
He emphasizes that the situation got out of control not least because of the conservatives' obstructionist policy in the upper house of parliament, the Bundesrat. Steinbrück spoke of a daunting task ahead which would not be made any easier by filing an officially unconstitutional budget for 2006.
"I'm afraid we'll have to produce a budget which complies with constitutional requirements, he said. "And we have to be resourceful to do that. And it's also quite clear that come 2007 our budget will have to be in line with the EU's deficit rules, meaning that our fresh borrowing must be below three percent of GDP."
Taki n g it to the highest court?
Germany's opposition parties -- the new Left Party, the Greens and the Free Democratic Party -- find the current debate on the legitimacy of the future budget worrying.
Left party leader Oskar Lafontaine and others would like to take the matter to the constitutional court in Karlsruhe, but to do that they would need more seats in the Bundestag than they actually possess. Oskar Lafontaine sees the constitution being breached in more ways than one.
"I don't think it's in line with the constitution that three opposition parties which after all represent the interests of a quarter of the population have no way of fighting the proposed budget effectively," he said.
Angela Merkel might be well-advised to rein in infighting among her cabinet
Political observers believe that the current row over the budget between the future coalition partners does not bode well for the new government. Conservative Chancellor-designate Angela Merkel would be well-advised to stop her ministers designate from pointing their fingers at each other. Otherwise she could find herself facing difficulties not unlike those that led to the downfall of her predecessor.