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Home , Andreas Scheuer, Andrea Nahles, Angela Merkel, Anja Karliczek, Heiko Maas, Helge Braun

Global & Markets Research Email: [email protected] URL: www.uob.com.sg/research Macro Note : Back In Charge

Monday, 05 March 2018 Germany’s Social (SPD) voted decisively for a coalition with Angela Merkel’s conservatives on Sunday, clearing the way for a new government in Europe’s largest economy and ending months of political uncertainty.

Suan Teck Kin, CFA In contrast to the Christian Democratic Union (CDU) / Christian Socialist Union (CSU), the SPD Head of Research [email protected] asked their members of which a total 463,723 were eligible to participate in a vote on the coalition treaty via a simple “yes” or “no” decision. The ballot took place between 20 February and 2 Lee Sue Ann March, and the result was published on 4 March, with the “yes” winning 66.02% of the votes Economist [email protected] (78.4% participation rate).

From Here… Merkel’s path to chancellorship is now cleared. Federal President FrankWalter Steinmeier will shortly propose Merkel as his candidate for the chancellorship. Merkel needs at least 355 out of 709 votes in the to become chancellor again, but given that the CDU/CSU/SPD, with a total of 399 seats, holds a comfortable majority, a defeat for her seems unlikely. Once Merkel is elected on 14 March, she can start nominating her cabinet. Please refer to the next page for Germany’s likely new government going .

Germany: Angela Merkel Back In Charge Monday, 05 March 2018 1 Page Germany’s Likely New Government

Merkel has led Germany for 12 years, and by the end of this new term, she Angela Merkel Chancellor will be tied with fellow CDU predecessors and (CDU) in terms of office tenure.

Scholz is all but set to be finance minister, and he will likely become vice- Finance Minister chancellor as well. Currently the of , he is considered the (SPD) high-level SPD politician with the most financial expertise.

This is the most-talked about position in the upcoming Cabinet. would like to continue in his position as head of the Foreign Ministry, Sigmar Gabriel Foreign Minister but after a public spat with former SPD leader , it looks like (SPD) Gabriel will not be part of the new Cabinet after all. As to who will succeed him? That's still up in the air, but it will be an SPD politician.

This will be the first time that the vaguely patriotic "Heimat" concept (roughly Minister of the Interior, Heimat and Construction "homeland") is included in a federal minister's domain. , however, (CSU) has had a state Heimat Ministry for five years.

Von der Leyen has been defense minister since 2013 and has now been Minister of Defense tapped by Merkel to keep the job. German media has speculated that Von (CDU) der Leyen could be a potential successor to Merkel.

Anja Karliczek The ministry's budget was recently increased by EUR11bn to pay for school Minister of Education and Research (CDU) and university improvements, especially with respect to digitalization.

Peter Altmaier This would be the first time in more than 50 years that a CDU politician holds Economic and Energy Affairs Minister (CDU) that post. Altmaier is regarded as extremely loyal to the chancellor.

The full name of the job Barley has held since June 2017 is minister of family affairs, senior citizens, women and youth. The trained lawyer may keep the Minister of Family Affairs (SPD) post, but she also may move to a different ministry. In this case, another SPD politician would take her place. Scheuer, considered a close ally of CSU party head Seehofer, could take Minister of Transport and Digital Infrastructure (CSU) over the Transport Ministry.

Julia Klöckner Klöckner has been tapped to head the Agriculture Ministry, where she Minister for Food and Agriculture (CDU) worked as parliamentary state from 2009 to 2011.

Minister for Economic Cooperation and Development Dorothee Bär (CSU) One of the most likely candidates for development minister is Dorothee Bär.

Eva Högl Högl could take over the Labor Ministry from , who is now Minister of Labor and Social Affairs (SPD) head of the SPD parliamentary party and designated party leader.

Maas was justice minister during the last government's term, and he could Minister of Justice and keep the job. However, he is also on the list of candidates for the job of (SPD) foreign minister of minister of labor.

Merkel's nominee for health minister stands out: The 37-year-old Jens Spahn Minister for Health not only represents a new political generation within the CDU, but was also (CDU) heavily critical of Merkel's welcoming policy toward refugees.

Germany's current minister for the environment, nature conservation and Barbara Hendricks Minister for the Environment nuclear safety has reached retirement age. But Hendricks may well continue (SPD) on in her job.

Helge Braun, who is currently minister of state at the Chancellery, has been Chief of Staff at the Chancellery nominated by Merkel for the promotion to Chancellery head. He would take (CDU) over from .

Source: Various News Reports, UOB Global Economics & Markets Research

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