It is almost a month since the elections in Germany, and finally a coalition settlement has been reached between the CDU/CSU and the FDP.

Let’s take a look at what it will mean…

Tax reforms

Tax reforms worth €24bn have been promised (that’s British billions), although they will not happen until 2011.

My thoughts: no rush then to get those in, plenty of time for that to change

Income tax will be reformed, with a more “banded” type of system.

I’m sure I’ve heard that before.  I’m just not sure after which election…

VAT rates look to stay the same, but there will be some changes are to what qualifies for the reduced 7% rate.

Benefits

Child benefit should be going up in 2010 to 184EUR per month for the first and second children, higher for others.

Well that’s something, it went up 10EUR this year, so another 20EUR will be nice, but bear in mind that despite inflation it has otherwise been stuck at 154EUR since the Euro was introduced in 2002!

Health

No immediate changes are planned to the health system, but instead the coalition will wait for recommendations to be made by a Government committee.

Oh great!  So we’re stuck with the Gesundsheitsfond.  I guess there is no chance of paying less into it and the self-employed will still be at a disadvantage when it comes to sick pay.

Ministers

Wolfgang Schäuble (CDU) moves from the interior ministry (sort of the Home Office) to the finance ministry (ie. the Treasury).

I find this a strange decision, but it could make a lot of people in the IT world happy.

Ursula von der Leyen (CDU) stays at the family ministry.

I’m sure that many in the IT industry would have liked to see her move as well – along with Herr Schäuble she was awarded the “Big Brother Award” this year because of her policies, which have often been criticised by IT specialists and journalists alike.

Karl-Theodor zu Guttenberg (CSU) moves from industry to defence.

I don’t get this one, because during the campaign and even after the election, I thought all the parties were “agreed” that he was the right man for the job his was in.  What happened?

Guido Westerwelle (FDP) will be foreign minister and vice-chancellor

No real surprise here.  The foreign minister is an important role in the German Government, and being vice-chancellor at the same time will probably give him the power to take decisions at high-level meetings without Frau Merkel.  Will she be spending more time in Germany now?

There are also many new ministers that I do not (yet) know much about, or even have an opinion on.

So is it good for Germany?

It’s too early to say.  With so many fresh faces in the cabinet I’m hoping that there will finally be some movement on issues that were just forgotten under the previous Government.  On the other hand, I have a feeling that the new one might just be taking things a little to relaxed, announcing plans now that will not come to fruition for another 15 months.

Or are they just taking things slowly to make sure they get new laws right the first time?