10 of the world's most powerful women

If Janet Yellen becomes as head of the Federal Reserve, as she is expected to in January, she will become one of the most powerful women in the world. But who are the others?

Janet Yellen, nominated yesterday as chairman of the US Federal Reserve

Yellen will be the first woman to head the mighty US Federal Reserve if she takes over at the central bank in January. Her job will be to maintain the stuttering recovery of the world's largest economy. Yellen is an expert on the causes and impact of unemployment and is regarded as an economic "dove" who will stick with current chairman Ben Bernanke's massive support programme for the economy. Yellen first joined the Fed in 1977 but left in 1978 to lecture at the London School of Economics with her Nobel-winning economist husband George Akerlof. She has straddled academia and public office since and advised Bill Clinton for two years of his presidency. Her appointment as the Fed's vice chairwoman in 2010 set her up to succeed Bernanke.

Indra Nooyi, chair and chief executive of PepsiCo

Nooyi has proved herself a tough operator leading PepsiCo – the world's second biggest food and drinks business – for the last seven years. Two years ago there was pressure for her to stand down but she held on and increased sales. In July, she faced down activist investor Nelson Peltz, who was applying pressure for Pepsi to split its drinks business off from the more successful snacks arm. Nooyi, 57, was born and educated in India. After various strategy and consulting jobs, and postgraduate study at Yale, she joined Pepsi in 1994, aged 29. By 2001 she was chief financial officer, running the group's strategy and overseeing purchases of Tropicana and Quaker Oats Co on her way to the top job.

Gina Rinehart, mining magnate

Gina Rinehart's $17bn fortune appreciates by about $1bn every year, which makes her Australia's richest person and one of the wealthiest women in the world. Still, last year she felt able to urge Australians to work for a day. She has also made the news as a result of a legal battle with three of her four children, who she cut out of the family trust. Rinehart, 59, left the University of Sydney after a year after finding a leftwing economics lecturer and fellow students not to her taste. Instead, she returned to her native Perth to work at Hancock Prospecting, the mining business owned by her father, Lang. Despite hitting the headlines, Rinehart has generally shunned the press, yet she has bought stakes in media businesses Channel 10 and Fairfax.

Dilma Rousseff, president of Brazil

Hardly a household name – even in Brazil – for much of her career, Dilma Rousseff, a career civil servant who had never so much as run for elected office, has become the first woman president of the world's sixth-largest economy in 2011. A former 1960s revolutionary who spent three years in jail and was reportedly tortured, she joined President Lula da Silva's government in 2003 as energy minister and two years later was made his chief of staff (during her election campaign, Lula helpfully dubbed her "mother of the nation"). Brusque and short-tempered, the 66-year-old is known to favour a strong state presence in key areas including oil, energy and banking . She has also pledged to fight corruption and invest more in transport, health and education following mass street protests earlier this year that revealed how Brazil's boom has failed to improve the lives of many ordinary citizens. She is not afraid to take on the big guns, either, berating the US at the United Nations and postponing a visit to Washington over the recent NSA spying revelations.

Christine Lagarde, managing director, IMF

After the downfall of Dominique Strauss-Kahn, in 2011 Lagarde became the first woman to head the International Monetary Fund. She was plunged straight into fighting the eurozone's sovereign debt crisis. Lagarde, 57, was a labour and competition lawyer at Baker & McKenzie for more than 20 years, rising to become the firm's first female chairman. After a spell as French trade minister she became the first woman to head France's economic ministry. Lagarde was elected as a safe pair of hands at the IMF but caused outrage when she told the Guardian that Greek citizens were going through payback time for not paying their taxes. A run at the French presidency could be next.

Hillary Clinton, politician

"Wife, mom, lawyer, women & kids advocate," begins Hillary Rodham Clinton's Twitter profile, before continuing: "FLOAR [First Lady of Arkansas], FLOTUS [First Lady of the United States], Senator, SecState, author, dog owner, hair icon, pantsuit aficionado, glass ceiling cracker" and concluding, coyly, "TBD …" [To Be Determined]. It's the last bit that everyone is interested in: will the 56-year-old, Yale-educated lawyer be the Democrats' 2016 presidential candidate? Clinton, who in 2008 won more primaries and delegates than any other woman candidate in US history, has said only that she will start thinking about it "some time next year". Polls suggest that if she does run, 65% of Democrats would vote for her and she would beat the two current Republican frontrunners to become the first woman president of the US. In the meantime, now a fully private citizen for the first time in 30 years, she says she is mostly at home with husband Bill "laughing at our dogs, watching stupid movies, taking long walks." Of course.

Angela Merkel, chancellor of Germany

One of only two EU leaders to have survived the economic crisis, Angela Merkel is on course to become Europe's longest-serving elected female head of government after romping home for the third time as Germany's chancellor last month. A quantum physicist by training, the 59-year-old has little style, less charisma, no apparent ideology and a marked aversion to risk in all its forms: her job, she has said, is "to advance, even if only by a few centimetres, and solve problems". But behind her motherly aura (not for nothing do Germans call her "Mutti") and solid stewardship of Europe's largest economy in a time of crisis is a ruthless politician who has seen off all challengers within her own CDU party and consistently outmanoeuvred the opposition. Merkel dodges confrontation, never shows her hand, and always wins.

Melinda Gates, co-chair, The Bill and Melinda Gates Foundation

As co-chair of The Bill and Melinda Gates Foundation, Melinda Gates and her husband Bill – the richest man in the world – hold the purse strings to an endowment of .3bn. The foundation is best known for its work fighting diseases, including malaria and polio, and for speaking out on sensitive subjects, such as birth control, a tricky topic given Gates' own Catholic faith. Having studied for a BA and an MBA at Duke University, Gates joined Microsoft as a product developer in 1987. She met Bill the same year, married him in 1994 and left the company in 1996 to raise the couple's three children, before becoming increasingly involved with philanthropy. Though the family's public mission to save the world is not without controversy, Gates herself is widely regarded as a thoughtful campaigner who works methodically to drive change without seeking the limelight.

Park Geun-hye, president of South Korea

The daughter of the strongman who ruled South Korea for much of the 1960s and 1970s, Park Geun-hye was inaugurated as the east Asian powerhouse's first woman president in February. Five times an MP, the 60-year old conservative had earlier served as her father Park Chung-hee's de facto first lady after her mother, Yuk Young-soo, was killed by a sniper's bullet intended for the president (who was himself killed five years later by his own intelligence chief in 1979). Gracious but tough (she once continued campaigning after requiring 60 stitches following a knife attack), Park, who has devoted herself to her father's legacy and never married, says one of her key priorities will be repairing the country's vitally important relations with North Korea. Some are optimistic for the cause of women following Park's election in a country which, despite its advanced economy, ranks only 108 out of 135 for gender equality. Others fear she is merely the latest in a line of prominent Asian daughters and widows of powerful fathers or husbands.

Sheryl Sandberg, chief operating officer, Facebook

Sandberg divided opinion earlier this year with Lean In, her book of advice for women in business. Some criticised her for patronising readers but it sold 150,000 copies in its first week. Sandberg, 44, negotiated a stake in Facebook and became the first woman on the company's board when she joined four years ago from Google. Since Facebook's flotation last year she has been worth about $400m. Sandberg's contacts span business and politics – she was chief of staff to US Treasury secretary Larry Summers from 1996 to 2001. But she hasn't always been so ambitious. After graduating from Harvard she moved to Washington DC to find an eligible husband, married at 24 and divorced a year later. "Pretty shocking," she told the Guardian.

WomenJanet YellenHillary ClintonDilma RousseffMelinda GatesChristine LagardeAngela MerkelSheryl SandbergGina RinehartSean FarrellJon Henleytheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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Bershidsky on Europe: Paulson Bets on Greece

Bershidsky on Europe: Paulson Bets on GreeceBloombergHere's today's look at some of the top stories on markets and politics in Europe: Airbus breaks through to Japanese market. Airbus announced that the Japanese flag carrier, Japan Airlines, has ordered 31 A350s for $9.5 billion and optioned another 25 ...

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GEORGE SOROS: Europe's Nightmare Is Getting Worse, And Only Germany Can Make It Stop

Billionaire financier and legendary speculator George Soros gave a speech today at the Global Economic Symposium in Kiel, Germany, titled "The Future of Europe."

In the speech, Soros declared the euro crisis over:

The euro crisis is now over. This became official in the German elections where the rules governing the euro were not even discussed. Yet the system that emerged from the crisis is far from satisfactory. Mainstream economists would call it an inferior equilibrium; I call it a far-from equilibrium situation.

The euro crisis has already transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of sovereign and equal states that surrendered part of their sovereignty for the common good. It has turned into a relationship between creditors and debtors that is by its nature compulsory and unequal.

When a debtor country gets into difficulties the creditor countries gain the upper hand. The rules they have established merely perpetuate this state of affairs. That is liable to be politically unacceptable and it has the potential of destroying the European Union altogether. Only the creditors are in a position to prevent this outcome but they do not seem to show any inclination to do so. 

However, he also said that what has taken its place is only making Europe's nightmare worse (emphasis added):

The Eurozone is now in a mild rebound led by Germany but the heavily indebted countries are lagging behind. The divergence is largely due to their higher debt burden and the higher cost of money. Since these are recurrent, the divergence is bound to get wider with the passage of time.

What needs to be done follows directly from this analysis of what has happened. Recognizing the mistakes and identifying the misconceptions that have created the current situation is the first step; correcting them is the second. Only Germany can initiate the process because, as the country with the highest credit standing, it is in the driver’s seat. If a debtor country tried to do it would merely aggravate its own position.

Admitting and correcting mistakes is never easy. In this case there is no shame attached to it because the situation was so complicated that it boggled every mind. Doing it would earn Germany the long lasting gratitude of the rest of Europe. Failure to do is much worse. It has created a nightmare in which the victims of the current policies have to live in their waking lives.

The full text of the speech is included below.

-------------------------------------------------

The Future of Europe: Remarks delivered at the Global Economic Symposium, 10/01/13 in Kiel, Germany

October 01, 2013

I shall take a holistic approach to the future of Europe. I have developed a conceptual framework, which has guided me in my decisions throughout my adult life. The framework is much broader than the financial markets; it deals with the relationship between thinking and reality. What makes that relationship so complicated is that the thoughts and actions of participants are part of the reality they have to think about. Their thinking serves a dual function: on the one hand they try to understand the world in which they live – that is the cognitive function; on the other, they want to influence the events in which they participate – that is the manipulative function. The two functions interfere with each other – I call the interference reflexivity. The cornerstone of my conceptual framework is the human uncertainty principle, which is based on the twin pillars of fallibility and reflexivity.

The human uncertainty principle has far reaching implications for scientific method. It applies only to social phenomena and thereby it separates the social sciences from the natural sciences. Economic theory has sought to imitate the natural sciences, particularly Newtonian physics. Consequently my conceptual framework is in direct conflict with mainstream economic theory.

The differences are especially pronounced in dealing with financial problems in general and the euro crisis in particular. Mainstream economics has pursued timelessly and universally valid laws whose validity can be tested by reference to the facts. I contend that the facts produced by social processes do not constitute a reliable criterion for judging the validity of theories because of the human uncertainty principle. I do not deny the possibility of establishing universally and timelessly valid laws – the human uncertainty principle is one of them – but I consider such laws too vague and general to be of much use in producing specific predictions and explanations.

In any case social phenomena are easier to explain than to predict. The past is uniquely determined while the human uncertainty principle renders the future inherently indeterminate. That is not how Newtonian physics works. Mainstream economics sought to apply the Newtonian approach to social phenomena by introducing the concept of equilibrium. This required elaborate mental gymnastics. It started with the theory of perfect competition, which assumed perfect knowledge and ended with rational expectations and the efficient market hypothesis.

By contrast I emphasize the role of misconceptions, misinterpretations and a sheer lack of understanding in shaping the course of events. I focus on the process of change rather than on the eventual outcome. The process involves reflexive feedback loops between the objective and subjective aspects of reality. Fallibility insures that the two aspects are never identical. That is where my framework differs from mainstream economics.

Feedback can be negative or positive. Negative feedback narrows the divergence between the objective and subjective aspects of reality; positive feedback widens it. Carried to an extreme, negative feedback would lead to equilibrium; positive feedback would result in mayhem. In standard economics equilibrium is the inevitable outcome, in my framework equilibrium is one of two theoretical extremes. Reality ranges from near equilibrium to far from equilibrium conditions, but the distribution of cases does not follow a regular bell curve; it tends to cluster around the two extremes. The extremes act as “strange attractors” because people tend to use dichotomies to simplify matters. A situation can be considered stable or unstable. But people’s opinion can shift quite quickly. This leads to the “fat tails” observed in market volatility- that is inherent in my framework but not in standard economics.

Using this conceptual framework I have developed a boom-bust theory of financial crises, which is the opposite of equilibrium. It consists of a trend that prevails in reality and a misinterpretation or misconception relating to that trend. The trend and the misconception mutually reinforce each other until they grow to such an extent that the misconception becomes increasingly apparent. Eventually an inflection point is reached where the trend is reversed and a positive feedback loop develops in the opposite direction.

Boom bust processes or bubbles are only one manifestation of reflexivity and only occasionally do they grow to a size where they assume macroeconomic importance. There is also a reflexive interaction between the authorities and the markets. Behind the invisible hand of markets lurks the visible hand of politics. Both the markets and the authorities are fallible; that is what makes their interaction reflexive. While bubbles occur only intermittently the interplay between economics and politics is ongoing. We need to study the political economy where every event is unique instead of looking for timelessly valid laws.

My conceptual framework consists of universally valid generalizations; therefore its usefulness in explaining or predicting the political economy is strictly limited. But as a hedge fund manager I have used it to develop specific theories about specific situations and my performance record testifies to their usefulness.

I have followed the euro crisis closely ever since its inception. I have written numerous articles about it that has been collected in a book. I found my conceptual framework particularly helpful because the crisis is the result of a reflexive interaction between financial and political processes and combines historical, cultural, moral and above all legal aspects. That makes it so complicated that it boggles the mind. Misconceptions have played a central role. I shall focus on them instead of presenting a comprehensive analysis.

The design of the common currency had many flaws. Some of them were known at the time the euro was introduced. Everybody, for example, knew that it was an incomplete currency; it had a central bank, but it didn't have a common treasury. Other defects were discovered only in the crisis. In retrospect the most important defect was that the euro exposed the government bonds of member countries to the risk of default. In a developed country with its own currency, the risk of default is absent because it can always print money. But by ceding that right to an independent central bank, the member-states put themselves in the position of third-world countries that borrow in a foreign currency. This fact was not recognized either by the markets or by the authorities prior to the crisis, testifying to the fallibility of both.

When the euro was introduced, the authorities actually declared government bonds to be riskless. Commercial banks were not required to set aside any capital reserves against their holdings of government bonds and the European Central Bank (ECB) accepted all government bonds on equal terms at its discount window. This set up a perverse incentive for commercial banks to buy the debt of the weaker governments in order to earn what eventually became just a few basis points, because interest rate differentials converged to practically zero.

This convergence in interest rates caused divergences in economic performance. The weaker countries enjoyed real estate, consumption and investment booms, while Germany, weighed down by the burdens of reunification, had to adopt fiscal austerity and structural reforms. This divergence was not envisioned by the Maastricht Treaty, which assumed that only the public sector produces disequilibrium.

Then came the Crash of 2008. After the Lehman bankruptcy European finance ministers declared that no other systemically important financial institution would be allowed to fail but Chancellor Merkel insisted that the obligation should fall on each country individually, not on the European Union or the Eurozone collectively. That was the onset of the euro crisis but it took markets more than a year to react to it. Only when Greece revealed a much larger than expected fiscal deficit did markets realize that Greece may actually default on its debt – but then they raised risk premiums with a vengeance not only on Greek bonds but on the bonds of all the so-called periphery countries. By then those countries became saddled with much more debt than a third world country would have been able to accumulate.

The outbreak of the crisis put the European financial authorities in a bind. They had to deal with the crisis in accordance with rules that were patently inappropriate to prevailing conditions; yet they couldn’t change the Maastricht and Lisbon Treaties because public opinion especially in France and Germany was opposed to any further steps towards European integration. Consequently, the authorities had to resort to all kinds of legal subterfuges to prevent the euro from collapsing. This made the rules governing the euro much more complicated than they would have been if they had been designed de novo. At the same time some of the changes that arose in practice, notably the risk of default and the bail-in of bondholders were gradually given legal recognition. This has put heavily indebted countries at a large and recurrent disadvantage, which has not been properly acknowledged.

In this context the double meaning of the German word “Schuld” has played a key role. It means both debt and guilt. This has made it natural or “Selbstverstandlich” for the German public to blame the heavily indebted countries for their misfortunes. But that is not justified by the facts, except in the case of Greece. The Greek government had blatantly violated the Treaties, but the other debtor countries had played by the rules. Indeed Spain used to be held up as a paragon of prudent fiscal management. Clearly the faults were systemic. The responsibility for the misfortunes of the heavily indebted countries rests mainly with those who decided the rules that govern the euro, Germany and France foremost among them. But this conclusion would be stubbornly resisted in those countries.

The euro crisis is now over. This became official in the German elections where the rules governing the euro were not even discussed. Yet the system that emerged from the crisis is far from satisfactory. Mainstream economists would call it an inferior equilibrium; I call it a far-from equilibrium situation. The euro crisis has already transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of sovereign and equal states that surrendered part of their sovereignty for the common good. It has turned into a relationship between creditors and debtors that is by its nature compulsory and unequal. When a debtor country gets into difficulties the creditor countries gain the upper hand. The rules they have established merely perpetuate this state of affairs. That is liable to be politically unacceptable and it has the potential of destroying the European Union altogether. Only the creditors are in a position to prevent this outcome but they do not seem to show any inclination to do so.

The defects of the currently prevailing situation fall into two categories: political and financial. On the political side Germany has emerged as the de facto hegemonic power. Germany cannot dictate to the others but the European authorities cannot make any proposals without obtaining Germany’s permission. Democracy flourishes in Germany but debtor countries stumble from one political crisis to the next. And the German Constitutional Court has emerged as the most powerful judicial authority in Europe. Since Germany, mindful of its recent history, did not want to play a hegemonic role, it is unwilling to accept the responsibilities and liabilities that go with that role. As a result Germany is reviled in some other countries while Germany feels unjustly accused of occupying a position that it actively sought to avoid.

Contrast that with the United States, which acted as a benign hegemon at the end of World War II embarking on the Marshall Plan; subsequently it was acclaimed as the leader of the free world and enjoyed the lasting allegiance of Europe. Current German attitudes are also in sharp contrast with the attitude prevailing at the time of German reunification. At that time Germany became the engine of European integration in order to achieve that goal.

On the economic front the austerity policy advocated by Germany proved to be counterproductive. Every euro of reduction in the fiscal deficit caused more than a euro of reduction in GDP – in other words the fiscal multiplier turned out to be more than one. The German public found that difficult to understand. The fiscal reforms introduced by the Schroeder government were successful; why should a policy that worked for Germany not work for Europe? The reason is that the Schroeder government operated in an inflationary environment and the current environment is deflationary. It took a long time for the European authorities to recognize this fact but eventually they did and they stopped imposing additional austerity measures. That relieved the downward pressure and allowed the Eurozone to hit bottom and the financial crisis to abate. The Eurozone is now in a mild rebound led by Germany but the heavily indebted countries are lagging behind. The divergence is largely due to their higher debt burden and the higher cost of money. Since these are recurrent, the divergence is bound to get wider with the passage of time.

What needs to be done follows directly from this analysis of what has happened. Recognizing the mistakes and identifying the misconceptions that have created the current situation is the first step; correcting them is the second. Only Germany can initiate the process because, as the country with the highest credit standing, it is in the driver’s seat. If a debtor country tried to do it would merely aggravate its own position. Admitting and correcting mistakes is never easy. In this case there is no shame attached to it because the situation was so complicated that it boggled every mind. Doing it would earn Germany the long lasting gratitude of the rest of Europe. Failure to do is much worse. It has created a nightmare in which the victims of the current policies have to live in their waking lives. Now that the euro crisis has ended, Germany has emerged victorious. But it is a Pyrrhic victory that would be better to avoid. I’m glad that this conference, which is almost unique in recognizing the severity of the problems that continue to confront Europe is exploring the possibilities.

Join the conversation about this story »

    

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The Anti-Debt-Relief Crowd Is Wrong on Greece

On the very day Germans voted for a new government last month, a team from Greece’s international creditors was visiting Athens amid the widespread expectation that a new aid package would be needed, including debt relief. The International ...

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Austria's centrist coalition survives far-right election gains

Werner Faymann's Social Democrats and conservative People's party both shed more than two points from 2008

The partners in Austria's pro-Europe, centrist coalition scraped a combined majority on Sunday despite recording their worst election results since the second world war and losing support to the far-right Freedom party and a new liberal party.

Chancellor Werner Faymann's Social Democrats (SPO) – who had campaigned on a platform of defending jobs and pensions and redistributing wealth – got 27.1% of the vote, down more than two points from 2008, preliminary results showed. The conservative People's party (OVP) also shed more than two points to 23.8%, giving the two parties that have dominated post-war Austrian politics a combined – albeit reduced – majority for a new five-year term in parliament.

Faymann said he would invite OVP leader Michael Spindelegger to join him in a new coalition government but acknowledged the result was not an overwhelming vote of confidence. "There is much to do, on the one hand to justify this result and on the other hand to build up more trust for the future," he told ORF television. Spindelegger said he was open to talks, but refused to rule out a coalition with the far-right Freedom party (FPO) and the new Eurosceptic party of Austro-Canadian car-parts magnate Frank Stronach – a combination that would be numerically feasible. "This result is a wake-up call," he told ORF. "We can't simply go on as before."

Sylvia Kritzinger, head of the social science methods department at Vienna University, said she saw Spindelegger's comments as posturing to gain leverage with the SPO. "I think that the grand coalition is going to continue its work although you can't really call it a 'grand' coalition any longer," she said.

The anti-immigration and anti-Islam FPO, which seeks to end taxpayer-funded bailouts of weaker eurozone countries, boosted its share of the vote by almost four points to 21.4%. "This is an incredible success. We are the election-night victors," said FPO leader Heinz-Christian Strache, 44, a polarising figure who is popular with many young people but anathema to the political establishment that he loves to bash.

Populists hostile to the euro or to immigration have ridden a wave of anger over austerity, recession and unemployment to make inroads from the Netherlands to Italy, France, Finland and Greece since the financial crisis began in 2008. Their rise highlights the threat to centrist parties in government around Europe that are implementing unpopular austerity policies and structural economic reforms. More than 10% of Austria's nearly 6.4 million eligible voters applied for absentee ballots, which were due to be tallied by Monday, but these were unlikely to change the outcome significantly.

The rightwing Alliance for the Future of Austria (BZO), which split from the FPO in 2005, narrowly failed to win re-election with 3.%. "Politics hasn't been put on a new track today but it was pretty close," said Wolfgang Bachmeyer, head of Austria's OGM marketing institute. "If the BZO had scored a few more tenths of a percentage point … then the decades-long era of the grand coalitions between the SPO and OVP would have been over."

The results set up weeks of haggling over a new government. At loggerheads on tax, education and other issues, the coalition parties have been avoiding structural reforms in favour of minor policy adjustments, eager not to stall the export-driven economy.

Last year they were able to cobble together a €27bn (£22.6bn) package of spending cuts and tax rises that aims to balance the budget by 2016. But finances are under pressure from the cost of supporting the ailing nationalised bank Hypo Alpe Adria.

Critics say the coalition's lack of appetite for robust reform may over time jeopardise the high standard of living that most of Austria's 8.4 million residents enjoy. The ruling parties had counted on their record in guiding Austria through the crisis relatively unscathed to win another term. But unlike in neighbouring Germany, where Chancellor Angela Merkel scored a landslide victory on 22 September partly on the strength of the German economy, many voters felt hard done-by, despite the lowest jobless rate in the EU and economic growth well above the EU average. A string of corruption scandals has also contributed to disenchantment with mainstream Austrian politicians.

The environmentalist Greens, who would have been likely to join the existing coalition parties in government had they failed to secure a majority, gained one point to win 11.5%. Strache's FPO could not overtake the OVP due to competition from Stronach's new party, also Eurosceptic but without the FPO's anti-foreigner tone. Team Stronach got 5.8%, ahead of the evening's other big winner, the new liberal party Neos, which got 4.8% - above the 4% threshold needed to enter parliament.

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Exclusive: Greece does not need third bailout, seeks debt 'reprofiling'

Greece does not require a third bailout and can cover its needs without further burdening its current backers, by improving the terms of its debt and possibly returning to the bond market next year, the ...

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NEWS ANALYSIS: Question mark over German coalition remains after Merkel victory

by  XINHUA

NEWS ANALYSIS: Question mark over German coalition remains after Merkel victory  2013-09-25 13:55:55  

     BERLIN, Sept. 25 (Xinhua) -- A question mark remains over which party will join a coalition government with German Chancellor Angela Merkel's Christian Social Union (CSU), as mainstream opposition forces try to reach consensus within themselves.

     The the center-left Social Democrats (SPD), which took 25.7 percent of votes in Sunday's election, will hold a party conference in Berlin on Friday and try to reach consensus on the coalition issue.

     Opinion polls suggested that most Germans would support a coalition between Merkel's conservatives and the SPD, the two biggest political parties in Germany, to form a stable government and rule the Europe's largest economy for the next four years. Merkel headed such a "grand coalition" during her first term in 2005-2009.

     However, Merkel and her conservative bloc may have to make big concessions on major policies and cabinet posts in order to win over the SPD, as the center-left party suffered the worst ever federal election result after the previous coalition.

     The SPD sees differently on major domestic issues from Merkel's CDU and their Bavarian sister party the Christian Social Union (CSU), which may lead to tough and long coalition negotiation talks.

     A particularly conflict-prone topic would be the nationwide legal minimum wage. The SPD has stressed greater social justice and reiterated the plan to introduce a national minimum wage of 8.50 euros (11.35 U.S. dollars) per hour. The party also wants to raise taxes on incomes above 100,000 euros to 49 percent from 42 percent.

     However, Merkel said such tax hike plans would risk spoiling the good situation in the country. The CDU party rules out tax increases and supports minimum wage deals struck by employers and trade unions in different industry sectors and regions.

     On handling the eurozone debt crisis, the SPD called for more solidarity measures for indebted eurozone members including Greece. In contrast, Merkel insisted on structural reforms and spending cuts by indebted countries and said it is her responsibility as chancellor to keep the reform pressure on Greece.

     Merkel reiterated after her party's election victory that the European policy of the next government would not change.

     Merkel's CDU/CSU bloc proved to be the biggest winner with 41.5 percent of votes in the federal election. But her current junior coalition partner the pro-business Free Democrats (FDP) party failed to retain seats in the parliament with a disappointing result of 4.8 percent.

     Without a majority of the parliament seats, CDU/CSU union has to find a partner to form a coalition.

     Besides the SPD party, another possible party to enter a coalition with Merkel's conservative CDU/CSU is the Green Party, which came fourth in Sunday's election with 8.4 percent of votes.

     But Bavarian Premier Horst Seehofer, head of CDU's Bavarian sister party CSU, has ruled out the possibility of cooperation with the environmentalist Green Party for fear of being perceived as the conservative party's leftward shift, according to local news magazine Der Spiegel.

     In addition, the entire leadership of the party would quit at the next party congress by the end of October to make room for renewal. They include co-chairpersons Claudia Roth and Cem Oezdemir and the party council with the leading candidates Juergen Trittin and Katrin Goering-Eckart.

     The Greens' co-chairman Oezdemir said in an German television interview after the election that the difference with the Merkel's CDU is "of course enormous in fields like energy policy, social policy and economic policy, but we will talk and see."  Enditem

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Merkel Won So What Now For Greece

German Chancellor Angela Merkel really rules Europe too, and what she says goes: especially for Greece, which relies on her support for more critical rescue loans. German Chancellor Angela Merkel's runaway re-election victory was indeed impressive. One has to go back to the time of Conrad Adenauer to find an equivalent political phenomenon in Germany history. Good for her. Let us recognize, ...

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Greece back in the middle of European fiscal drama with a third bailout

Greece back in the middle of European fiscal drama with a third bailoutHot AirThe election is won for German Prime Minister Angela Merkel, which means that bailout-weary Germany — the country that happens to have financed the lion's share of 240 billion euros in the aid pledged to Greece over the past several years — is going ...

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Merkel’s Message to Greece

After easily winning re-election in a runaway rout to gain a third term, German Chancellor Angela Merkel, whose country is the biggest contributor to bailouts for Greece, said she will now return to tightening the screws on the Greek government to keep imposing more harsh austerity measures while ruling out any chance it will be […]

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Concern in Greece over Angela Merkel's win

BBC NewsConcern in Greece over Angela Merkel's winBBC NewsThere has been a worried response in Greece to the win for German Chancellor Angela Merkel in Sunday's election. The front page of the centre-left daily Ta Nea has a mocked-up photo of Angela Merkel on a throne with the headline "Triumph for the Queen ...Greece, other bailed out countries get Merkel for another four yearsKathimeriniHow Will The German Election Effect Europe? Spain, Greece React To Merkel ...International Business TimesWill Greece Decide The German Elections? If So, What's Next?ForbesSBS -Deutsche Welleall 1,244 news articles »

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Greek concern over Merkel victory

The convincing election victory for Chancellor Angela Merkel leads to a worried response in Greece.

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Angela Merkel Wins German Elections

BERLIN — Chancellor Angela Merkel led her conservatives to a stunning victory in Germany's election Sunday, a personal triumph that cements her position as Europe's most powerful leader. However, she will need to reach out to center-left rivals to form a new government after her coalition partner crashed out of Parliament. Merkel's Union bloc scored its best result in 23 years to put her on course for a third term, winning 41.5 percent of the vote and finishing only five seats short of an absolute majority in the lower house. The 59-year-old benefited from a strong economy and low unemployment that have helped keep her personal popularity sky-high – a contrast with the string of leaders who have lost their jobs in other European countries since the continent's debt crisis erupted three years ago. A new coalition probably won't result in any major shifts in German policy, though it could bring a slightly softer tone to managing the crisis. Merkel, Germany's chancellor since 2005 and the de facto leader of the European crisis response that has mixed aid with austerity, told supporters it was "a super result." She wouldn't immediately speculate about the shape of the next government, but made clear she plans to serve a full term. "I see the next four years in front of me and I can promise that we will face many tasks, at home, in Europe and in the world," Merkel said during a television appearance with other party leaders. Despite the scale of her win, governing isn't likely to get easier for Merkel. Her partners of choice, the pro-business Free Democrats, won only 4.8 percent of the vote. They fell short of the 5 percent needed to win seats in Parliament for the first time in Germany's post-World War II history, paying the price for frequent governing infighting and their failure to secure tax cuts they pledged before going into government four years ago. Merkel looks likely to end up leading either a "grand coalition" government with the center-left Social Democrats of defeated challenger Peer Steinbrueck – reviving the alliance that ran Germany in her first term – or, less likely, with the environmentalist Greens. Either way, several weeks of difficult negotiations are expected. "The ball is in Merkel's court," said Steinbrueck, a former finance minister under Merkel who has said he won't serve under her again. "She has to get herself a majority." "Angela Merkel is stronger than ever, also in her party," said Manfred Guellner, the head of the Forsa polling agency. "But governing is going to be odd because she will have to form a `grand coalition' although she is only a few seats away from an absolute majority." Merkel's conservatives finished far ahead of Steinbrueck's Social Democrats, who won 25.7 percent of the vote – not much better than the post-war low of 23 percent they hit four years ago. Their Green allies polled a disappointing 8.4 percent, while the hard-line Left Party scored 8.6 percent. But although the three parties on the left together hold a thin parliamentary majority, there's virtually no chance of them governing together. The Left Party includes heirs of East Germany's former communist rulers, opposes German military deployments abroad and is the only party that voted against Merkel's policies of bailing out debt-troubled European countries in exchange for reforms. The two center-left parties on Sunday renewed promises not to form an alliance with the Left. "We did not achieve the result we wanted," Steinbrueck told supporters, insisting he wouldn't engage in "speculation" about the next government. Merkel's conservatives, the Social Democrats and Greens "have largely similar positions" on Europe, said Oscar Gabriel, a political science professor at Stuttgart University. He noted, however, that "there are a few nuances," with the center-left parties more open to limited pooling of European countries' debt something the chancellor has refused to countenance. A "grand coalition" might result in a somewhat greater emphasis on bolstering economic growth over the austerity that Germany has insisted on in exchange for bailing out economically weak European countries such as Greece. During the election campaign, Merkel and Steinbrueck clashed over center-left calls for tax increases on high earners and a mandatory national minimum wage. Merkel rejected both ideas, arguing that they would hurt the economy. All the same, a "grand coalition" is more likely to be to put together than a conservative-Green alliance, which would face wider cultural and political differences. Green leader Juergen Trittin said of possible negotiations: "I don't think the probability of anything coming out of it is particularly high." True to her methodical style, Merkel said Sunday she would proceed "step by step" in working toward a new government. Still, she beamed earlier in the evening as she was greeted by a cheering crowd chanting "Angie! Angie! Angie!" at her party's headquarters. Merkel pledged that "we will do everything together in the next four years to make them successful years for Germany." A new anti-euro party, Alternative for Germany, came close to winning the 5 percent support needed to win seats in Parliament on Sunday. The party, which advocates an "orderly breakup" of the eurozone and appeared to have a wider appeal to protest voters on the right, finished with 4.7 percent. Its leader, Bernd Lucke, said it had "taught the other parties to be scared" and "strengthened democracy in Germany." Merkel has pursued a hard-nosed course in the euro crisis, insisting on spending cuts and economic reforms in exchange for bailout struggling countries such as Greece. The bailouts haven't been popular, but Germany has largely escaped the economic fallout from the crisis, and Merkel has won credit for that. Europe played only a very limited role in the campaign. Still, senior Merkel ally Horst Seehofer, the conservative governor of Bavaria, conceded that the government needed to do a better job of explaining its policies. He told ZDF television he had noticed a "communication deficit" on the campaign trail. There was shocked silence at the Free Democrats' election event as exit polls showed the party slumping below 5 percent of the vote. Four years ago, the party won nearly 15 percent, its best-ever result; over the past week, it had pleaded for support from Merkel supporters to keep it afloat. Merkel frequently called the outgoing coalition "the most successful government since reunification" 23 years ago, but her own popularity didn't extend to the coalition. "It's the bitterest, saddest hour of the Free Democratic Party," the party's leader, Vice Chancellor Philipp Roesler, said. Gabriel, the political scientist, said conservative voters who voted for the Free Democrats in 2009 "returned in droves" to Merkel. The smaller party, which was long the kingmaker of German politics, "isn't considered competent by the voters anymore," he said. The conservative result was close to an absolute majority because of the rule requiring parties to win 5 percent support to claim seats in the lower house. Many small parties miss that threshold, meaning their votes don't count in the division of seats. Sunday's result gives the conservative bloc of Merkel's Christian Democratic Union and its Bavaria-only sister, the Christian Social Union, 311 seats in Parliament. The Social Democrats won 192 seats, the Greens 63 and the Left Party 64. Turnout edged up to 71.5 percent from 70.8 percent four years ago. ____ Associated Press correspondents Frank Jordans, Kirsten Grieshaber, Robert H. Reid and David Rising contributed to this report.

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German euroskeptics on the rise, liberals in decline

By Alexandra Hudson and Madeline Chambers BERLIN (Reuters) - A new anti-euro party narrowly missed entering parliament in a German election on Sunday, drawing millions of voters with a euroskeptic message that may have laid the foundations for a strong challenge in a European Parliament vote next year. The Alternative for Germany (AfD), formed just seven months ago to tap into resentment in Europe's biggest economy about bailouts for weak euro zone states like Greece, generated a late surge in support to score 4.8 percent. ...

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Merkel eyes third term in tight German election

By Michelle Martin BERLIN (Reuters) - Germans voted on Sunday in an election expected to hand Chancellor Angela Merkel a third four-year term, but she may be forced into an awkward coalition with her leftist rivals following a surge in support for a new anti-euro party. Europe is closely watching Germany's first national election since the eruption of the euro zone debt crisis in 2009. Some hope Merkel will take a softer stance on struggling euro states such as Greece if she is pushed into a so-called grand coalition with the Social Democrats (SPD). ...

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Germany votes with Merkel set for third term

BERLIN (AFP) - Germany votes Sunday with Chancellor Angela Merkel poised to win a third term, making her Europe's only major leader to survive its financial crisis but potentially forced into governing with her main rivals.After shepherding Europe's top economy through the debt turmoil, Merkel emerged more popular than ever due to her motherly reassurance as the crisis felled leaders in France, Greece, Italy and Spain. ...

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Nearly half of Greeks believe that Merkel reelection would be bad for Greece

If Chancellor Angela Merkel were to win federal elections in Germany on Sunday, the consequences on Greece's interests would be "somewhat negative" according to 47 percent of Greeks questioned as part of Public Issue opinion poll published on Friday.A sizable 79 percent of respondents also said they have a negative opinion of the German chancellor, who has insisted on a policy mix ...

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Bitter Spaniards to vote in German poll with 'donated' ballots

By Michelle Martin BERLIN (Reuters) - Spaniards and Greeks bitter about tough austerity measures in their countries for which they blame German Chancellor Angela Merkel hope to oust her in Sunday's national election by using ballots 'donated' by German voters. On a Facebook page called "Electoral Rebellion" foreigners unable to participate in the election can post requests for votes and Germans who believe they deserve a say in a poll whose outcome will affect the rest of Europe can offer theirs up. ...

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German MPs call for Greece to forgo scheduled assumption of EU presidency

Two German MPs have called for Greece to forgo its scheduled assumption on January 1 2014 of the European Union's rotating presidency, claiming that the debt-ridden country should not be burdened with the financial cost of the task, an estimated 100 million euros.Klaus-Peter Willsch, of the Christian Democratic Union, the party led by German Chancellor Angela Merkel, told the mass ...

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Greece: Anger goes beyond despair

For the last three years Greek society has suffered a prolonged period of economic and political crisis, which has been magnified by unprecedented austerity measures.

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