German grand coalition deal reached–130 pages of policy transparency

The Christian Democrats (CDU/CSU) and Social Democrats (SPD) have reached their long-aniticpated agreement on a grand coalition. As outgoing SPD leader Franz Müntefering said at a news conference:

None of us was prepared for a grand coalition — none of you
either. We learned to make compromises.

CDU leader Angel Merkel, as expected, will become the first woman to hold the post of German Chancellor.

The text of the deal is 130 pages long, according to DW. There is a reason why these things take time to negotiate! But to all those who like to disparage coalition government (using such phrases as stumbling or quagmire to describe the bargaining process), take note: The level of detail that a coalition agreement entails ensures a very high level of transparency over what the government will do. As such it provides multiple mechanisms for the parties to the agreement (and their constituencies) to monitor one another, thereby generating mutually reinforcing incentives to adhere to the deal. Neither single-party majority government nor the US presidential system (whether unified or divided) provides anything like this level of openness about what the governing politicians are committed to do.

Even more to the point, the government is committed to some signigicant movement on contentious issues. Among the major bargains struck, again from DW:

The parties agreed in their program to raise the main value-added tax rate by three points to 19 percent from 2007, an unpopular measure whose revenue will be used to plug the budget and lower non-wage labor costs to promote hiring.

The retirement age will gradually be raised to 67 from 65.

In other words, as I noted back when there was so much hand-wringing about Germany’s government being deadlocked over needed reforms, this centrist government formation is indeed more favorable to addressing policy problems than the preceding one, which was stymied by its own left wing as well as by CDU opposition in the upper house. Now, both of those potential vetoes have been neustralized.

At times the coalition talks appeared close to break down, but of course, that was part of the game of poker each side was playing, not only with the other party, but also with its own internal dissidents. Neither party wanted a grand coalition, but neither wanted an early election, either. Now, will the government last a full 4-year term? It still has to be elected by the Bundestag, but that will be a formality.