ONE of the more bizarre recent sights on the European stage was that of Gerhard Schroder, the former German Chancellor, giving his views on the future direction of the European Union at the summit meeting held at Hampton Court Palace last week. Herr Schroder, although now in retirement after his defeat as leader of the Social Democrats at the national election in September, spoke as if he were still in office and one of the EU's big three with Blair and Chirac. Angela Merkel, whose Christian Democrats narrowly won the election, was apparently too busy putting her Grand Coalition together to attend the summit. Almost 50 days have now passed since the German people gave Frau Merkel a majority of three parliamentary seats over Herr Schroder; she concluded that three is not enough and that a Grand Alliance with the Social Democrats would be the best thing for the country. In doing so she ignored the differences between the two parties on reform to Germany's social model and measures to get its sluggish economy moving, and appointed Social Democrat ministers to several key posts, somewhat to the annoyance of members of her own party. Although the coalition has not actually taken office it is already fracturing; Edmund Stroiber, Frau Merkel's closest ally and rival among the Christian Democrats, has decided that he would prefer to remain as first minister in his power base of Bavaria rather than become Economics Minister in Berlin, and the Social Democrat Franz Muntefering who was due to become Vice-Chancellor also seems to be having second thoughts. Under the German constitution Angela Merkel has until November 22 to finalise her coalition and present it to parliament for a vote of confidence. If she is unable to do this it is likely that the German voters will have to be asked again for their verdict. This would mean a further delay of two or more months before a government could effectively address the problems facing the German economy which are also, to a significant extent, the EU's problems also. It would also mean that Germany would be left without a decisive voice in the remaining period of Britain's presidency of the EU during which difficult decisions will have to be taken on the EU's future budget.
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