Angela Merkel may have won the German Chancellorship, but the socialists will keep the Finance Ministry, and without a majority in the cabinet Merkel will struggle to make necessary changes to the tax system.
Even before a new government can begin to work, a further month of negotiations is needed, and the two opposed parties must approve its policy platform.
Social Democrats will have the foreign, finance, labor, justice, health, transport, environment and development ministries, while the Christian Democrats will have the economy, defense, interior, agriculture, family and education portfolios. Edmund Stoiber, Merkel's colleague, will be economics minister. Each party can choose its own ministers.
Gerhardt Schroeder, Chancellor for the last seven years, has said that he will play no role in the coalition government.
During negotiations so far, it appears to have been agreed that the tax system should be simplified, but most of Merkel's campaign tax pledges - including plans to cut tax breaks for Sunday and night shifts and a proposal to finance a cut in non-wage labor costs by increasing value-added tax - have already been ditched. And the flat tax, sorry, remind me, what was that?
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