German Chancellor Angela Merkel wins second term

http://timesofearth.com/Worldnews/?NT=0&nid=12189 -German Chancellor Angela Merkel has won a narrow victory in an MMP election that is likely to produce a right-wing coalition.

BERLIN - German Chancellor Angela Merkel said shell press ahead with tax cuts and labor-market deregulation after winning re-election with enough support to govern with the pro-business Free Democrats.

With Germany struggling to recover from the deepest economic slump since World War II, voters spurned plans by Merkels Social Democratic challenger to raise taxes on top earners. Frank-Walter Steinmeiers SPD had its worst postwar result in what he called a bitter day after sharing power with Merkel for four years and governing for the previous seven.

Theres a clear sentiment in favor of economic changes, especially on income taxes, Tilman Mayer, head of the Bonn- based Institute for Political Science, said in an interview. Voters have turned their back on grand coalition-style compromise politics.

Merkel, 55, said on ARD television that talks on forming a coalition with the Free Democrats will proceed quickly, and her focus will be on creating jobs in Europes biggest economy. She dismissed the FDPs call for a complete overhaul of the tax system, saying she wanted to be seen as the chancellor of all Germans and wont let her new junior partner dictate policy.

Merkels Christian Democrats and their Bavarian sister party, the Christian Social Union, won 33.8 percent in the elections to the 598-seat lower house of parliament and the Free Democrats 14.6 percent, ARD projections showed as of 10:04 p.m. The Social Democrats had 23.1 percent, a drop of 11 percentage points from 2005, the biggest decline for any party in postwar history. The anti-capitalist Left Party won 11.9 percent and the Greens 10.6 percent.




While the projections gave the CDU-FDP a 32-seat majority, Merkel also steered her party to its worst result in modern Germanys 60-year history. Merkel and Steinmeiers two blocs saw their support plummet to 57 percent, compared to a combined 69 percent in 2005 and 77 percent in 2002.

Guido Westerwelles FDP recorded its best-ever result, putting it in position to push its agenda.
Merkel pledged to cut the lowest tax rate to 12 percent from 14 percent and raise the threshold for the top rate to 60,000 euros from 52,000 euros. The Free Democrats want to replace the progressive income-tax system and its exemptions with just three brackets: 10 percent, 25 percent and 35 percent.

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