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Merkel says German coalition has taken 'important step' forward with health deal

Merkel says German coalition has taken 'important step' forward with health deal

German Chancellor Angela Merkel on Thursday praised a deal on health reform as a "very important step" forward for her left-right coalition after weeks of feuding that raised doubts over the government's future.
The overnight compromise between Merkel's conservatives and their center-left partners, the Social Democrats, allows her "grand coalition" to move ahead with its flagship reform plan.
Critics charged that the reform would miss its aims of easing the burden on employers in Europe's biggest economy from spiraling health costs and making the health system more competitive.
Still, coalition leaders were relieved to put behind them open feuding over how to finance the costs, which had triggered speculation that the alliance might break apart over the plan.
"We succeeded, and anyone who knows how complicated things are in health policy also knows that the coalition has succeeded in a very important step," Merkel said in an interview with n-tv television.
"This is a good sign for other political projects, such as corporate tax reform," she added. "We still have a lot of work ahead of us this autumn."
The coalition partners produced an outline reform plan in July but then bickered over the details.
Merkel's popularity soared after she became chancellor last November, but has sagged _ along with that of both parties _ as they squabbled over what was always expected to be the government's most difficult reform.
The plans foresee injecting more federal government funds into the health system to slow a steady rise in insurance premiums paid by employers and employees.
They are also supposed make it easier for patients to switch between health insurers to foster competition and improve efficiency.
The main sticking points were whether to cap premiums paid by employees and how much Germany's wealthy west should subsidize the formerly communist east.
Social Democrat Chairman Kurt Beck said his party upheld its demand for a cap on premiums to protect poorer Germans from excessive charges, while it gave up some demands for change at private health insurers.
"It was important for us to maintain the principle of solidarity," Beck said at a pre-dawn news conference. "We were all aware how important it was for the coalition to have a success."
The deal includes a clause designed to protect wealthy states from shouldering too much of the burden. While some measures are to take effect in April, the introduction of a central fund that would distribute money to insurers was delayed by a year to 2009.
Reducing payroll taxes is central to government plans to help German firms compete in a globalized economy. It hopes they will hire more staff, reducing high unemployment.
The health 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.
"The core aims of the reform were intensified competition and uncoupling (health care) from labor costs," said Juergen Thumann, the head of the Federation of German Industry. "Neither aim was reached."
Opposition parties criticized the plan, and a group of public health insurers dismissed it in a joint statement as "a political compromise on the backs of the insured," who would end up paying more.
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 conservative Christian Social Union, insisted Thursday's accord was merely "political," and said he wanted to see the draft legislation before giving a final green light.
Still, Social Democratic parliamentary leader Peter Struck said he expected the Cabinet to approve the plan on Oct. 25.
Karl-Rudolf Korte, professor of political science at the University of Duisburg, said the squabble had made the coalition look "very divided."
However, he told ARD television it had now proved, "and this carries a positive image, that apparently they are able to agree despite great differences."
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Associated Press writer Stephen Graham in Berlin contributed to this report.


Updated : 2021-07-31 12:01 GMT+08:00