Woman takes power in Germany

But the 51-year-old former scientist will have a tough job turning around Europe’s biggest economy after years of stagnation. In a potential sign of trouble ahead, more than 50 members of Merkel’s unwieldy 448-lawmaker coalition voted against her Tuesday. Still, the strength of her party’s alliance with the left-wing Social Democrats allowed her to win easily in the lower house, or Bundestag.

"Expectations are very high among people in this country that problems get solved, policies made and decisions taken,” Merkel said as she ceremonially took over the imposing chancellery across from the Reichstag parliament building.

In an interview for ARD public television, she said the "no” votes did not bother her.

"My thoughts go back, eight weeks back, and I can only say, it’s an excellent outcome and a very solid foundation so that this government can succesfully do its work,” she said.

Merkel succeeds Gerhard Schroeder, whose government of Social Democrats and Greens was ousted by voters Sept. 18. Merkel’s more pro-American outlook contrasts with Schroeder’s criticism of the war in Iraq.

Merkel, typically reserved in public, smiled after the 397-202 vote was announced. Schroeder, who for three weeks clung to his demand to remain chancellor after his party finished a close second in the election, was the first to walk over and congratulate her.

Later, at her inauguration, she turned to Schroeder and said: "I would like to thank you for what you have done for our country,” citing his efforts to trim the welfare state and boost the economy, and declaring that her government would build on the "milestones” he set.

The Protestant minister’s daughter, who grew up in officially atheist East Germany, added the optional words, "So help me God,” to her oath, a phrase Schroeder had left out.

Indeed, Merkel could use some help in coaxing action from a joyless coalition. The election results showed little popular support for tough action many economists and business groups say is needed to attack 11 percent unemployment and sluggish growth.

She also faces foreign policy challenges such as nursing a recovering relationship with the United States.

Merkel, who heads the Christian Democratic Union, will begin her term in office — four years, if the coalition lasts — with visits to France and Britain on Wednesday and Thursday. A visit to Washington is expected in the next few weeks.

The White House congratulated Merkel and said it hoped she would meet soon with President Bush.

"We look forward to working closely with Chancellor Merkel and the new government to strengthen the U.S-German partnership in advancing freedom and prosperity around the world,” said Kate Starr, spokesperson for the National Security Council.

The new chancellor has suggested that Berlin will place less emphasis on relations with Paris and Moscow and says she views Europe as a partner, not a counterweight, to the United States.

Still, two close Schroeder allies — French President Jacques Chirac and Russian President Vladimir Putin — were quick to offer their congratulations Tuesday.

Merkel is the first chancellor to have grown up in Soviet-dominated Eastern Europe — until the fall of the Berlin Wall in 1989, the trained physicist was an unknown researcher at the East German Academy of Sciences. But she rose quickly through the ranks of her party after Germany was reunited in 1990, serving in the Cabinet of former conservative Chancellor Helmut Kohl.

Tuesday’s vote came exactly six months after Schroeder announced he was seeking national elections a year early, saying after a disastrous state election defeat that he no longer had a mandate for his attempts to streamline Germany’s expensive welfare system.

The inconclusive election forced Germany’s biggest parties into talks on a so-called grand coalition. Their main area of agreement was that Germany’s budget deficit must be brought within a European Union-imposed limit by 2007.

That led them to agree on tax increases, including raising the top income tax rate from 42 to 45 percent for people earning more than $295,000 annually and increasing a value-added tax from 16 to 19 percent.

They put off the VAT increase until 2007, however, aware that the economy is only slowly picking up speed as fearful consumers are not spending much. The government predicts 0.8 percent growth for this year and 1.2 percent for 2006, with exports into a growing world economy accounting for most of the increase.

Economists and business leaders say Germany’s chief problem is the high cost of labor, particularly non-wage costs such as payroll taxes for unemployment insurance, pensions and old-age care.

To get into the chancellery, Merkel had to give away many of her campaign promises, including a proposal to cut back on the regional wage bargaining that unions prefer and many companies dislike. A pledge to cut top and bottom income tax rates also went overboard. Also, the Social Democrats won half the Cabinet posts, including foreign affairs and finance.

Still, the overwhelming feeling Tuesday was one of relief.

"A lot of time has passed since May,” President Horst Koehler said as he formally appointed Merkel’s Cabinet. "It is good that Germany once again has a government that is capable of acting.”<