The CDU had received 35 percent of the vote in the September 18 national elections, winning 226 seats in parliament against 222 for the Social Democratic Party (SPD), which took 34 percent of votes cast.

Merkel will head a “grand coalition” government of the two parties, which they agreed to October 10. Each party will hold eight cabinet seats. The outgoing SPD-Green Party government headed by Chancellor Gerhardt Schröder had spearheaded cuts in unemployment benefits and other social programs. It had steadily lost popular support as a result of these anti-working-class measures.

The election results, in which neither of the largest parties of the German rulers could garner more than a third of the vote, reflected their difficulty in convincing workers and farmers to accept cuts in pensions, jobless benefits, and other gains. Much of the big-business press in Europe had hoped for a CDU-dominated government as the best instrument to step up the profit-driven attacks on workers’ social wage and job conditions.

The October 15 London Economist expressed its satisfaction that “things are moving in the right direction” now that Merkel has been chosen chancellor. The new government is expected to act on its campaign promises to weaken industry-wide union negotiations, and increase the weight of taxation on working people.

The “grand coalition” will continue attacks on workers’ gains. However, the German rulers are divided over how far and how fast to push these measures in face of working-class resistance to attacks by the SPD-led government under the Agenda 2010 series of measures. The jobless rate stands at more than 11 percent nationwide, and above 18 percent in the East.

Berlin has poured $1.5 trillion into eastern Germany since reunification in 1990 in an effort to spend its way out of a showdown with workers and farmers who anticipated a marked improvement in their standard of living. German big-business daily Der Spiegel’s recent report on “The Price of a Failed Reunification” complains that “Germany’s politicians are mostly silent about one of the country’s most pressing problems. Former East Germany is a major liability costing the economy 100 billion euros annually.” It describes the eastern part of the country as a “money pit” where even Leipzig, the East’s “boomtown,” has an unemployment rate of 21 percent.  
 
 
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