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Germany's grand coalition reaches ground-breaking deal

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Germany's grand coalition reaches ground-breaking deal


Coalition partners in Germany have reached a deal on healthcare reform – a crucial element of Chancellor Angela Merkel’s political agenda. Germany’s healthcare system is one of the most expensive in the world, sucking up some 140 billion euros a year. Only Switzerland and the US spend more. It had proved the most divisive issue so far for the grand coalition – and could continue to be.

While the head of the Social Democrats Kurt Beck hailed the deal as a good compromise, the conservative Christian Social Union gave it a cautious welcome. Chairman Edmund Stoiber who is also prime minister of Bavaria – one of Germany’s richest states – expressed reservations amid concerns the deal could inflict greater costs on Bavaria to the benefit of poorer states.

The reforms due to be introduced next April aim at simplifying Germany’s complex healthcare system and evening out disparities between states. Faced with an ageing population and the rising cost of treatment, Germany has seen its health spending rise massively in the past years.

The urgently-needed reform has threatened to derail the 11-month old grand coalition led by Merkel whose Christian Democrats are at a 16-year low in the polls.

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