Unemployment is obviously the biggest problem at the moment. But I'm not sure if the new government can really affect change in that department. Germany is too dependent on the global development.
She probably has enough steam to get into the harbor . . . but whether she will have the power to overhaul the German system is, I think, quite unlikely. Germans want some economic reforms, sure. But not Reaganomics that take away traditional strong social protections.
Merkel has absolutely no choice but to rein in spending. She'll have zero room for maneuver if she doesn't tackle the deficit.
Skepticism was big when Merkel started. Now the CDU is profiting from the good image of Chancellor Merkel and all that went well in the government, while the SPD suffers from all that went wrong.
A grand coalition is the likeliest option, but who will become chancellor, no one could yet predict. In the end, it might be neither Schroeder nor Merkel.
They aren't able to criticize her, that would help Schroeder. But if Merkel becomes chancellor, then she will be the candidate again in 2007, pushing back their political ambitions for several years.
That can't be the goal of any of the major parties. The people would likely punish them at the ballots for not being able to overcome their inner-party conflicts and finally form a government. They're sick of it.
Even if people agree with the need for reforms, they are uncertain about the flat tax. They are starting to fear that they could be the losers in this reform.
When he started to think that people could believe his model could become true then the campaign was weakened. People hesitated. They started to think if they would have to pay more tax than before.
We're still not sure whether all this is a planned strategy of the SPD leadership or if they are taking it step by step. It put the CDU under initial pressure, but it somewhat backfired, as Merkel's position has received firm and repeated backing from her state prime ministers.
