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Merkel presents coalition-saving health reform deal

Merkel presents coalition-saving health reform deal

German leaders thrashed out a deal on health service reform Thursday, hoping to draw a line under a bitter row in Chancellor Angela Merkel's coalition that threatened to unseat her government.
Merkel's conservatives and their Social Democrat coalition partners outlined plans in July to shore up the country's creaking health system.
The reform is designed to ease the burden on employers of spiraling health care costs, with the goal of stoking Germany's economy, Europe's largest.
However the parties have feuded openly about how to finance the shift, triggering speculation that the so-called "grand coalition" might break apart over its most high-profile reform plan.
"We have agreed on a far-reaching reform," Merkel said after seven hours of negotiations in her Berlin office. "This was only possible because all the parts of the grand coalition was prepared to give ground."
Merkel said her Cabinet hoped to approve new legislation before the end of the month. Once approved by parliament, some measures are to take effect in April, though the main provisions will not come into force until 2009, a year later than foreseen.
Merkel became Germany's first female chancellor in November after forging a left-right coalition between her Christian Democratic Union and its Bavaria-only sister party and the center-left Social Democrats.
After a flying start, her popularity and that of both parties have sagged during a summer of squabbling as they tackled what was always expected to be its most difficult reform.
The plans foresee injecting more federal government funds into the health system to slow the steady rise in insurance premiums paid by employers and employees.
They are also supposed make it easier for patients to switch between health insurance providers to foster competition and improve efficiency.
The main sticking points Wednesday was whether to put a cap on the premiums paid by employees and how much the wealthy west should subsidize the formerly communist east.
Social Democrat Chairman Kurt Beck said his party had upheld its demand for a cap on premiums to protect poor and elderly Germans from excessive charges. In return, it agreed to steps designed to cut bureaucracy and gave up some demands for change at private health insurers.
"It was important for us to maintain the principle of solidarity," Beck said. "We were all aware how important it was for the coalition to have a success."
Conservatives had argued that a tight limit would stifle competition among some 150 health insurance firms in Germany.
Reducing payroll taxes is central to the government's plans to help German firms compete in a globalized economy. The government also hopes firms will hire more staff and rein in the country's high unemployment.
The plans have been dogged by criticism that they will do little to counter the fast-rising price of caring for the country's aging population.
Merkel also faces persistent media speculation that powerful regional leaders in her own party are dissatisfied with her leadership.
Edmund Stoiber, the governor of Bavaria and leader of the wealthy state's Christian Social Union, glared at Merkel as she outlined Thursday's deal at a pre-dawn news conference.
The accord was merely "political," he insisted, adding that he wanted to see the draft legislation before giving a final green light. Merkel acknowledged that many details had still not been worked out.
Stoiber also claimed it could take a decade because of clauses designed to protect states such as Bavaria from shouldering too much of the burden.
Asked if other conservative state governors would support what had been agreed, Stoiber said "The colleagues trust me."
"Me too," added Merkel tartly.


Updated : 2021-05-07 17:50 GMT+08:00