Number: RL33252 Title: Germany's "Grand Coalition" Government: Prospects and Implications Authors: Francis T. Miko, Foreign Affairs, Defense, and Trade Division Abstract: A "grand coalition" government of Germany's two largest parties, the Christian Democratic Union/Christian Socialist Union1 (CDU/CSU) and the Social Democrats (SPD) led by CDU candidate Angela Merkel took office on November 22, 2005, after the two parties worked out an agreement on a coalition governing program. The German federal election of September 18, 2005, had produced no clear winner or direction for the next government. Some see this government as short-lived and unlikely to succeed, while others believe that only such a coalition has the combined strength to implement potentially painful but needed economic and social benefits reforms, assuming that it can overcome partisan politics. Foreign policy is likely to play a secondary and less contentious role, given the press of domestic business and a general consensus on most international issues. The atmosphere of U.S.- German relations has already improved since the Merkel government took office, as reflected by the successful first official visit of Chancellor Merkel to Washington on January 13, 2006. Pages: 16 Date: January 17, 2006