Editing Angela Merkel (section)

=== 2005–2009: First CDU–SPD grand coalition ===
{{Main|First Merkel cabinet}}

==== Election ====
On 30 May 2005, Merkel won the CDU/CSU nomination to challenge Chancellor [[Gerhard Schröder]] of the [[Social Democratic Party of Germany|SPD]] in the [[2005 German federal election|2005 federal elections]]. Her party began the campaign with a 21{{Endash}}point lead over the [[Social Democratic Party of Germany|SPD]] in national opinion polls, although her personal popularity lagged behind that of the incumbent. However, the CDU/CSU campaign suffered<ref name="Saunders-2005">{{cite news|url=https://www.theglobeandmail.com/news/world/popular-flat-tax-movement-hits-brick-wall-in-germany/article986606/|title=Popular flat-tax movement hits brick wall in Germany|first=Doug|last=Saunders|work=The Globe and Mail|date=14 September 2005|access-date=28 November 2015|archive-date=6 March 2016|archive-url=https://web.archive.org/web/20160306041049/http://www.theglobeandmail.com/news/world/popular-flat-tax-movement-hits-brick-wall-in-germany/article986606/|url-status=live}}</ref> when Merkel, having made economic competence central to the CDU's platform, confused [[gross income|gross]] and [[net income]] twice during a televised debate.<ref>{{Cite news|url=http://www.spiegel.de/politik/deutschland/cdu-panne-brutto-netto-merkel-a-368085.html|title=CDU-Panne: Brutto, netto, Merkel|last=Volkery|first=Carsten|date=3 August 2005|newspaper=Der Spiegel|access-date=19 May 2017|archive-date=5 February 2017|archive-url=https://web.archive.org/web/20170205135102/http://www.spiegel.de/politik/deutschland/cdu-panne-brutto-netto-merkel-a-368085.html|url-status=live}}</ref> She regained some momentum after she announced that she would appoint [[Paul Kirchhof]], a former judge at the German Constitutional Court and leading fiscal policy expert, as Minister of Finance.<ref name="Saunders-2005" />

Merkel and the CDU lost ground after Kirchhof proposed the introduction of a [[flat tax]] in Germany, again undermining the party's broad appeal on economic affairs.<ref>{{Cite book |last1=Crawford |first1=Alan |url=https://books.google.com/books?id=FJfLtLnhZkYC&pg=PT59 |title=Angela Merkel: A Chancellorship Forged in Crisis |last2=Czuczka |first2=Tony |date=12 June 2013 |publisher=John Wiley & Sons |isbn=978-1-118-64109-5 |page=135 |archive-date=27 November 2021 |archive-url=https://web.archive.org/web/20211127161704/https://books.google.com/books?id=FJfLtLnhZkYC&pg=PT59 |url-status=live}}</ref> This was compounded by Merkel's proposal to increase [[VAT]]<ref>{{Cite news|url=https://www.theguardian.com/world/2005/jul/12/germany.lukeharding|title=Merkel unveils tax-raising manifesto|last=Harding|first=Luke|date=11 July 2005|work=The Guardian|access-date=7 May 2017|language=en-GB|issn=0261-3077|archive-date=2 October 2017|archive-url=https://web.archive.org/web/20171002220429/https://www.theguardian.com/world/2005/jul/12/germany.lukeharding|url-status=live}}</ref> to reduce Germany's deficit and fill the gap in revenue from a flat tax. The SPD were able to increase their support simply by pledging not to introduce flat taxes or increase VAT.<ref name="Saunders-2005" /> Although Merkel's standing recovered after she distanced herself from Kirchhof's proposals, she remained considerably less popular than Schröder, who had been perceived as the more generally competent and trustworthy candidate.<ref name="Hilmer-2006">{{Cite journal |last1=Hilmer |first1=Richard |last2=Müller-Hilmer |first2=Rita |date=2006 |title=Die Bundestagswahl vom 18. September 2005: Votum für Wechsel in Kontinuität |trans-title=The Parliamentary Election of 18 September 2005: Verdict for a Change in Continuity |journal=Zeitschrift für Parlamentsfragen |language=German |issue=1/2006 |page=2}}</ref> The CDU's lead was down to 9 percentage points on the eve of the election, with Merkel having a significant lead in popularity based on opinion polls.<ref>{{Cite web|url=http://news.bbc.co.uk/1/hi/world/europe/4257010.stm|title=Germany votes in close election|date=18 September 2005|publisher=BBC|access-date=3 May 2017|archive-date=10 March 2006|archive-url=https://web.archive.org/web/20060310044057/http://news.bbc.co.uk/1/hi/world/europe/4257010.stm|url-status=live}}</ref><ref name="BBC-2005">{{Cite web|url=http://news.bbc.co.uk/2/hi/europe/4259052.stm|title=German election ends in stalemate|date=19 September 2005|publisher=BBC|access-date=5 May 2017|archive-date=18 March 2017|archive-url=https://web.archive.org/web/20170318214116/http://news.bbc.co.uk/2/hi/europe/4259052.stm|url-status=live}}</ref> On 18 September 2005, Merkel's CDU/CSU and Schröder's SPD went head-to-head in the national elections, with the CDU/CSU winning 35.2% (CDU 27.8% / CSU 7.5%)<ref name="Hilmer-2006" /> of the second votes{{Efn|In the [[electoral system of Germany]], "first votes" are cast for a constituency-level local representative, i.e. an individual, whereas "second votes" are cast for a party.}} to the SPD's 34.2%.<ref name="BBC-2005" /> The result was so close that both Schröder and Merkel initially claimed victory.<ref name="Packer-2014" /><ref name="BBC-2005" /> Neither the SPD{{Endash}}Green coalition nor the CDU/CSU and its preferred coalition partners, the [[Free Democratic Party (Germany)|Free Democratic Party]], held enough seats to form a majority in the Bundestag.<ref name="BBC-2005" /> A [[grand coalition]] between the CDU/CSU and SPD would face the challenge of both parties demanding the chancellorship.<ref name="BBC-2005" /><ref name="BBC News-2005" /> However, after three weeks of [[negotiation (process)|negotiations]], the two parties reached a deal for a grand coalition whereby Merkel would become Chancellor and the SPD would hold 8 of the 16 seats in the cabinet.<ref name="BBC News-2005">{{cite news|url=http://news.bbc.co.uk/2/hi/europe/4325600.stm |title=Merkel named as German chancellor |work=BBC News |date=10 October 2005 |access-date=27 August 2011 |archive-date=23 September 2013 |url-status = live|archive-url=https://web.archive.org/web/20130923013433/http://news.bbc.co.uk/2/hi/europe/4325600.stm  }}</ref> The deal was approved by both parties at party conferences on 14 November 2005.<ref>{{cite news |date=14 November 2005 |title=German parties back new coalition |work=BBC News |url=http://news.bbc.co.uk/1/hi/world/europe/4434812.stm |url-status=live |archive-url=https://web.archive.org/web/20090111191948/http://news.bbc.co.uk/1/hi/world/europe/4434812.stm |archive-date=11 January 2009}}</ref>

Merkel was elected Chancellor by the majority of delegates (397 to 217) in the newly assembled Bundestag on 22 November 2005, but 51 members of the governing coalition voted against her.<ref>{{cite news |date=22 November 2005 |title=Merkel becomes German chancellor |work=BBC News |url=http://news.bbc.co.uk/1/hi/world/europe/4458430.stm |url-status=live |archive-url=https://web.archive.org/web/20051209014210/http://news.bbc.co.uk/1/hi/world/europe/4458430.stm |archive-date=9 December 2005}}</ref> Reports at the time indicated that the grand coalition would pursue a mix of policies, some of which differed from Merkel's political platform as leader of the opposition and candidate for Chancellor. The coalition's intent was to cut public spending whilst increasing [[VAT]] (from 16 to 19%), [[social insurance]] contributions and the top rate of [[income tax]].<ref>{{cite news|title=German coalition poised for power |date=11 November 2005 |url=http://news.bbc.co.uk/1/hi/world/europe/4429518.stm |work=BBC News |archive-url=https://web.archive.org/web/20051125031009/http://news.bbc.co.uk/1/hi/world/europe/4429518.stm |archive-date=25 November 2005 |url-status = live}}</ref>

When announcing the coalition agreement, Merkel stated that the main aim of her government would be to reduce unemployment, and that it was this issue on which her government would be judged.<ref>{{cite news|title=Merkel defends German reform plan |work=BBC News |url=http://news.bbc.co.uk/1/hi/world/europe/4431262.stm |date=12 November 2005 |archive-url=https://web.archive.org/web/20060315055446/http://news.bbc.co.uk/1/hi/world/europe/4431262.stm |url-status = live|archive-date=15 March 2006 }}</ref>

==== Healthcare reform ====
Reform of the [[Healthcare in Germany|German healthcare system]] was a salient issue during the 2005 election; the previous system had been criticised as inefficient and overly bureaucratic.<ref>{{Cite news |date=4 July 2006 |title=Letter from Berlin: A Sickly Compromise for German Healthcare Reform |language=en |work=Der Spiegel |url=https://www.spiegel.de/international/letter-from-berlin-a-sickly-compromise-for-german-healthcare-reform-a-425036.html |access-date=6 August 2023 |issn=2195-1349 |archive-date=6 August 2023 |archive-url=https://web.archive.org/web/20230806181144/https://www.spiegel.de/international/letter-from-berlin-a-sickly-compromise-for-german-healthcare-reform-a-425036.html |url-status=live}}</ref> After a significant period of negotiations, a deal was passed in 2006. While this agreement was described as having "saved the coalition government", it was also widely criticised as ineffectual. The deal also increased the tax burden on employers and their publicly insured employees.<ref>{{Cite news |date=5 October 2006 |title=German Health Reform: Merkel Announces a Deal, Averts a Crisis |language=en |work=Der Spiegel |url=https://www.spiegel.de/international/german-health-reform-merkel-announces-a-deal-averts-a-crisis-a-440924.html |access-date=6 August 2023 |issn=2195-1349 |archive-date=9 June 2021 |archive-url=https://web.archive.org/web/20210609001250/https://www.spiegel.de/international/german-health-reform-merkel-announces-a-deal-averts-a-crisis-a-440924.html |url-status=live}}</ref><ref>{{Cite web |title=German Health Care Reform: Mission Impossible? |url=https://www.dw.com/en/german-health-care-reform-mission-impossible/a-2117345 |access-date=6 August 2023 |website=dw.com |language=en |archive-date=20 August 2017 |archive-url=https://web.archive.org/web/20170820183733/https://www.dw.com/en/german-health-care-reform-mission-impossible/a-2117345 |url-status=live}}</ref> The 2006 round of reforms introduced the "health insurance duty", which establishes that individuals must be insured either through the public insurance system or through private insurance firms and accordingly cannot be uninsured.<ref name="www.jstor.org">{{Cite web |title=Personal Responsibility for Health — Developments Under the German Healthcare Reform 2007 on JSTOR |url=https://www.jstor.org/stable/43ff418d-949c-3e2d-b7fa-d6eb41c8e135 |access-date=6 August 2023 |website=www.jstor.org |language=en |archive-date=3 November 2023 |archive-url=https://web.archive.org/web/20231103022413/https://www.jstor.org/stable/43ff418d-949c-3e2d-b7fa-d6eb41c8e135 |url-status=live}}</ref> The reforms also targeted [[preventive healthcare]] as a priority, particularly with regards to [[Elderly care|eldercare]].<ref name="www.jstor.org" />

==== Eurozone crisis ====
{{Main|European debt crisis|2008 financial crisis}}
{{See also|Greek government-debt crisis#Germany's_role_in_Greece}}
On 4 October 2008, following the [[Government of Ireland|Irish Government]]'s decision to guarantee all deposits in private savings accounts, a move she had strongly criticised,<ref>{{cite news |author=Dougherty, Carter |date=5 October 2008 |title=Germany guarantees all private bank accounts |newspaper=Forbes |url=https://www.nytimes.com/2008/10/05/business/worldbusiness/05iht-hypo.4.16708030.html |url-status=live |access-date=6 October 2008 |archive-url=https://web.archive.org/web/20140423001915/http://www.nytimes.com/2008/10/05/business/worldbusiness/05iht-hypo.4.16708030.html |archive-date=23 April 2014}}</ref> Merkel said there were no plans for the [[German Government]] to do the same. The following day, Merkel stated that the government would guarantee private savings account deposits, after all.<ref>{{cite news |last=Whitlock |first=Craig |date=6 October 2008 |title=Germany to guarantee Private Bank Accounts |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/wp-dyn/content/article/2008/10/05/AR2008100500816.html |url-status=live |access-date=6 October 2008 |archive-url=https://web.archive.org/web/20140110151109/http://www.washingtonpost.com/wp-dyn/content/article/2008/10/05/AR2008100500816.html |archive-date=10 January 2014}}</ref> However, two days later, on 6 October 2008, it emerged that the pledge was simply a political move that would not be backed by legislation.<ref name="bbc">{{cite news |date=6 October 2008 |title=Bank uncertainty hits UK shares |work=[[BBC News]] |publisher=[[BBC]] |url=http://news.bbc.co.uk/1/hi/business/7654182.stm |url-status=live |access-date=6 October 2008 |archive-url=https://web.archive.org/web/20081007064831/http://news.bbc.co.uk/1/hi/business/7654182.stm |archive-date=7 October 2008}}</ref> Most other European governments eventually either raised the limits or promised to guarantee savings in full.<ref name="bbc" />

The German government stepped in to assist the [[mortgage loan|mortgage]] company [[Hypo Real Estate]] with a bailout. The deal was agreed upon on 6 October, with German banks contributing €30 billion and the [[Deutsche Bundesbank|Bundesbank]] €20 billion to an emergency credit line.<ref>{{cite news |last=Parkin |first=Brian |author2=Suess, Oliver |date=6 October 2008 |title=Hypo Real Gets EU50 Billion Government-Led Bailout |newspaper=[[Bloomberg L.P.|Bloomberg]] |url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=amxJTktF7JMs |url-status=dead |access-date=6 October 2008 |archive-url=https://web.archive.org/web/20121022213102/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amxJTktF7JMs |archive-date=22 October 2012}}</ref>

At the time of the [[Greek government-debt crisis]], Germany was the largest creditor of the Greek government, giving it significant negotiating power.<ref name="Rankin-2021">{{Cite news |last=Rankin |first=Jennifer |date=23 September 2021 |title=The crisis manager: Angela Merkel's double-edged European legacy |language=en-GB |work=The Guardian |url=https://www.theguardian.com/world/2021/sep/23/the-crisis-manager-angela-merkels-double-edged-european-legacy |access-date=25 June 2023 |issn=0261-3077 |archive-date=23 September 2021 |archive-url=https://web.archive.org/web/20210923141710/https://www.theguardian.com/world/2021/sep/23/the-crisis-manager-angela-merkels-double-edged-european-legacy |url-status=live}}</ref> Merkel is often credited as having "saved the Euro", primarily due to her coordinating role in the development of debt relief policy.<ref name="Rankin-2021" /><ref name="Matthijs-2021" /><ref>{{Cite news |date=12 September 2021 |title=Merkel legacy: EU's queen with a tarnished crown |language=en-GB |work=BBC News |url=https://www.bbc.com/news/world-europe-58498231 |access-date=25 June 2023 |archive-date=13 September 2021 |archive-url=https://web.archive.org/web/20210913010507/https://www.bbc.com/news/world-europe-58498231 |url-status=live}}</ref> The austerity measures imposed on debtors such as Greece, which were a significant part of Merkel's position in the negotiations, have been criticised as overly harsh by some observers.<ref>{{Cite web |date=23 September 2021 |title=Auf Wiedersehen, Angela: How Merkel has shaped Europe and Germany |url=https://www.euronews.com/2021/09/23/angela-merkel-europe-s-fiercest-crisis-manager-likely-to-leave-a-void |access-date=25 June 2023 |website=euronews |archive-date=23 September 2021 |archive-url=https://web.archive.org/web/20210923113318/https://www.euronews.com/2021/09/23/angela-merkel-europe-s-fiercest-crisis-manager-likely-to-leave-a-void |url-status=live}}</ref><ref name="Matthijs-2021" /> Critics also highlighted Germany's own debt management issues.<ref>{{Cite news |date=21 June 2011 |title=Economic Historian: 'Germany Was Biggest Debt Transgressor of 20th Century' |language=en |work=Der Spiegel |url=https://www.spiegel.de/international/germany/economic-historian-germany-was-biggest-debt-transgressor-of-20th-century-a-769703.html |access-date=25 June 2023 |issn=2195-1349 |archive-date=11 May 2012 |archive-url=https://web.archive.org/web/20120511205116/https://www.spiegel.de/international/germany/economic-historian-germany-was-biggest-debt-transgressor-of-20th-century-a-769703.html |url-status=live}}</ref> A [[Bloomberg News|Bloomberg]] opinion piece noted that "irresponsible borrowers can't exist without irresponsible lenders"; accordingly, "Germany's banks were Greece's enablers."<ref>{{Cite news |date=23 May 2012 |title=Hey, Germany: You Got a Bailout, Too |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/opinion/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too |access-date=25 June 2023 |archive-date=19 January 2019 |archive-url=https://web.archive.org/web/20190119170336/https://www.bloomberg.com/opinion/articles/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too |url-status=live}}</ref>

In the course of the [[2008 financial crisis]], the Merkel cabinet increased the budget of the [[Kurzarbeit]] programme significantly and extended the permitted duration of such contracts from 6 months to 18 months.<ref>{{Cite news |date=24 November 2009 |title=Krisenhilfe: Merkel will Kurzarbeit bis Ende 2010 verlängern |language=de |work=Der Spiegel |url=https://www.spiegel.de/politik/deutschland/krisenhilfe-merkel-will-kurzarbeit-bis-ende-2010-verlaengern-a-663048.html |access-date=26 July 2023 |issn=2195-1349 |archive-date=9 March 2021 |archive-url=https://web.archive.org/web/20210309154845/https://www.spiegel.de/politik/deutschland/krisenhilfe-merkel-will-kurzarbeit-bis-ende-2010-verlaengern-a-663048.html |url-status=live}}</ref> Although similar provisions had existed previously, the Merkel cabinet's expansion of the programme was widely praised and is credited with having saved 500,000 jobs during the [[2008 financial crisis]].<ref>{{Cite news |date=14 September 2021 |title=Marking Merkel |language=en |work=Reuters |url=https://www.reuters.com/graphics/GERMANY-POLITICS/MERKEL/mopankkkova/ |access-date=26 July 2023 |archive-date=20 December 2022 |archive-url=https://web.archive.org/web/20221220134537/https://www.reuters.com/graphics/GERMANY-POLITICS/MERKEL/mopankkkova/ |url-status=live}}</ref><ref>{{Cite web |title=Kurzarbeit: Germany's Short-Time Work Benefit |url=https://www.imf.org/en/News/Articles/2020/06/11/na061120-kurzarbeit-germanys-short-time-work-benefit |access-date=26 July 2023 |website=IMF |archive-date=8 July 2020 |archive-url=https://web.archive.org/web/20200708022836/https://www.imf.org/en/News/Articles/2020/06/11/na061120-kurzarbeit-germanys-short-time-work-benefit |url-status=live}}</ref><ref>{{Cite web |work=OECD |date=2009 |title=Employment Outlook 2009 – How does GERMANY compare? |url=https://www.oecd.org/employment/emp/43707146.pdf |archive-date=24 September 2015 |archive-url=https://web.archive.org/web/20150924133418/https://www.oecd.org/employment/emp/43707146.pdf |url-status=live}}</ref>