Schroeder Seals Coalition Pact with Greens

BONN (Reuters) - Chancellor-elect Gerhard Schroeder signed an agreement on Tuesday with the ecologist Greens to give Germany its first centre-left coalition government in 16 years. Schroeder‘s Social Democrats pushed through most of their manifesto pledge

s on tax reform and job creation in the coalition talks with the Greens that followed the ouster of conservative Chancellor Helmut Kohl in a general election on September 27. The green fingerprint on the 51-page pact was a commitment to phase out Germany‘s important nuclear power sector. The SPD and Greens are expected to endorse the agreement at separate party conferences this weekend. The new Bundestag (lower house of parliament) is then expected to approve Schroeder as Germany‘s seventh post-World War Two chancellor on Tuesday. The pact, contained in a red-green folder, gives the Greens three cabinet posts. SPD party chairman Oskar Lafontaine, who is to the left of Schroeder, bagged the Finance Ministry and seized some of the powers of the Economics Ministry. This angered Schroeder‘s nominee for the economics post, entrepreneur Jost Stollmann, who turned down the job on Monday. Greens leader Joschka Fi- scher, a 1960s political radical, takes the Foreign Ministry. The coalition pact also plans reform of Germany‘s citizenship law, a so-called "alliance for jobs" employment scheme with employers and trade unions and higher fuel taxes to offset planned cuts to social security contributions. The signing ceremony coincided with the publication of a report by Germany‘s top six economic forecasting institutes criticising Schroeder‘s tax plans. The institutes said the 10 billion mark ($ 6.2 billion) tax reforms were too small to boost the economy and tackle unemployment of four million. "This tax reform is moving in the right direction but, concerning the size of the cut in tax rates as well as the gross and net reduction, it remains well behind what is necessary," the institutes said. The biggest cloud over the signing, however, was Stollmann‘s surprise refusal to join the government. Schroeder had brought in the computer millionaire and free market champion to appeal to middle of the road voters. "It was something of a shock," conceded SPD party manager Franz Muentefering. "But we shall not be distracted from our pro-business, centre ground line. That‘s a political conviction not dependent on one person," he told WDR 2 radio. Press commentaries said the Stollmann affair showed at best a degree of incompetence by the government-to-be. "It is quite amazing how much a government can do wrong before it has even taken office," said the Sueddeutsche Zeitung. Werner Mueller, an energy sector executive unknown to the public, was hastily called in on Monday to accept the post of economics minister.

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