New government

Angela Merkel sat down to talk with her coalition partner in Berlin, FDP leader Guido Westerwelle, with the debris of election night parties still being cleared away. Both parties have promised "quick but thorough" negotiations. Negotiations are expected to get underway this week.

Merkel said on Monday that she hoped the new government would be ready to take office by Nov. 9, the 20th anniversary of the fall of the Berlin Wall.

FDP Secretary General Dirk Niebel set out the agenda, putting off discussion of the make-up of the cabinet: "First we will talk about the policies, then about distributing the departments." But he emphasized that neither side would be hasty. "Solidity comes before speed. The policies will decide the tempo."

But having finally freed herself from an awkward partnership with the Social Democratic Party (SPD), Merkel faces hard negotiations with a her preferred partner, the hugely confident FDP, to whose enormous success she owes her victory.

Stubborn negotiators

Speaking in an interview with Deutschlandradio, Philipp Roesler, FDP economy minister in Lower Saxony, warned the CDU that they would find the FDP more assertive and stubborn negotiators than former partners SPD.

In an interview with Bavarian state radio, Bavaria's FDP leader Sabine Leutheusser-Schnarrenberger underlined her party's differences with the Christian Democrats (CDU), particularly in the areas of financial regulation and tax policy. The FDP will almost certainly try to avoid stricter regulation of financial markets and will attempt to secure a withdrawal of the state from banks affected by the finance crisis.

Leutheusser-Schnarrenberger repeated the assertion that the distribution of cabinet posts is the final stage of the talks, but noted that the FDP's strong election results compared with those of its coalition rivals, the Christian Social Union (CSU), the CDU's sister party in Bavaria. The CSU, which got disastrous results in the election, will also be vying for ministry responsibilities, but as Leutheusser-Schnarrenberger pointed out, "we are significantly stronger than the CSU."

Tax still a central issue

Despite a massive state debt, brought on by heavy stimulus packages introduced at the beginning of the year, the FDP will also look for opportunities to make tax cuts. "We only ever made one condition in the election campaign," Niebel told TV broadcaster Phoenix, "We need a real tax structure reform, and a simplification and unburdening of the tax system."

CDU Secretary General Ronald Pofalla hinted at concessions to the pro-business party in this area. "We want a two-stage tax cut worth 15 billion euros ($22 billion)."

bk/dpa/AFP
Editor: Nancy Isenson