Merkel strikes coalition deal

(Vatican Radio) Germany's Angela Merkel will return as chancellor for a third term under a coalition deal that has been agreed with her former opponents, the Social Democrats.

After 17 hours of long and tense negotiations, Merkel's conservative Christian Union (CDU/CSU) signed a 185 page agreement with the Social Democrats (SPD). It's called "Shaping Germany's Future", and contains several policies the Christian Democrats previously opposed. Under the agreement, the Christian Democrats have agreed with the SPD that they will implement a minimum wage and a lower retirement age. However, Chancellor Merkel was pleased that her Christian Democrats ensured taxes will not be raised. She stressed that Germany, as Europe's largest economy, will continue to balance its budgets.

"First of all, we are getting to a period where we will not take up any more government debts," Merkel said. "We will focus on creating good chances in life for difficult layers of the population, single parents and so on. Therefore we will not take on anymore further debts." Her words made clear that Germany will not be in a rush to support more bailouts for other struggling European nations. Yet Merkel also said that her government would remain a strong supporter of Europe.

The agreement still has to be ratified by the membership of the Social Democrats, but the leadership has pledged to sell the deal as a real improvement in the lives of Germany's increasing number of low-paid workers. Analysts say it will also strengthen Chancellor Merkel's position on Europe, as she will have the overwhelming majority a cross-party grand coalition brings. In the past, she has had to work hard for agreement within Germany's parliament, the Bundestag, for German participation in sensitive issues such as bail-outs.

Listen to Stefan Bos' report: