Talks dragged on into early this morning but Angela Merkel has finally sealed a deal with her coalition partners to form a new German government.The Chancellor’s conservatives have been struggling to settle differences with their liberal allies, led by Guido Westerwelle. The first openly gay leader of a mainstream German political party, he is reported to be Foreign Minister in the incoming administration. The task of tackling the soaring budget defecit will go to Wolfgang Schaeuble, moving on from the Interior to the Finance Ministry. Tax cuts of 24 billion euros are on the way according to sources. Reports also say the new coalition plans to reduce military service for young German men to six months. The Defence portfolio is set to go to the country’s most popular politician Karl-Theodor zu Guttenberg. He will take over from Franz Josef Jung, who is expected at the Labour Ministry. After starting life in Vietnam, Philipp Roesler becomes Germany’s first Asian-born cabinet minister. At health, he wil have to push through major reforms. The government blueprint comes in time to grant the Chancellor’s wish – to be sworn in for a second term in the week ahead.