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...central banks pull back is a critical issue that still needs to be coordinated. One of the risks is that inflation could soar due to the explosion of national debt in many countries during the crisis. And early signs suggest governments have wildly different strategies. In Germany, for example, Chancellor Angela Merkel promised tough action to bring down the budget deficit, while in France, President Nicolas Sarkozy is looking to add to the country's debt though a huge government-bond issue next year. Such divergences are already causing alarm. Unless exit strategies also address the long-term sustainability...

Author: /time Magazine | Title: Braking the Banks | 9/28/2009 | See Source »

...polite posturing of Germany's election campaign captures the mood in most European capitals at the moment. Both Chancellor Angela Merkel's center-right Christian Democrats and the center-left Social Democrats of Frank-Walter Steinmeier remain committed to Berlin's 4,000-strong troop deployment in Afghanistan as part of the multinational force there. But Die Linke, a smaller, left-wing party, has won support by campaigning on an immediate withdrawal, and as public support for the Afghanistan mission falls even the mainstream leaders are having to take notice. Steinmeier has recently hinted that he would pull troops...

Author: /time Magazine | Title: Afghanistan: Looking For the Way Ahead | 9/28/2009 | See Source »

...Tonight we can celebrate, but after that there is much work waiting for us, and many problems to solve." That sentiment is a reliable standard for victorious politicians seeking to temper triumphalist election-night speeches with a little humility. But as Chancellor Angela Merkel acknowledged her party's win in parliamentary elections in Germany on Sept. 27, she had especially good reason to caution against overexuberance. Her Christian Democrats (CDU/CSU) had secured another four-year term as the senior partner in a ruling coalition. And thanks to big gains by the center-right Free Democrats (FDP), who espouse economic liberalism...

Author: /time Magazine | Title: 'Much Work' Ahead for German Chancellor Merkel | 9/28/2009 | See Source »

...Merkel's victory speech, she emphasized her intention to be a "Chancellor to all Germans." If she meant this as a warning that she intends to resist her new partner's tax-cutting agenda, Westerwelle won't be happy. The final shape of the new government won't emerge until after a period of horse-trading and a vote in the Bundestag, probably in a week or two, to confirm Merkel as Chancellor. Westerwelle, despite his focus on economics, is expected to become Foreign Minister, the traditional role for the leader of the junior coalition party. The biggest foreign policy...

Author: /time Magazine | Title: 'Much Work' Ahead for German Chancellor Merkel | 9/28/2009 | See Source »

...last time there was a push for deeper integration, it came from the German side, in the form of a 1994 paper authored by Wolfgang Schäuble, a close confidant of then Chancellor Kohl, and Karl Lamers, then foreign-affairs spokesman for Merkel's Christian Democratic Union. They outlined a new "core" Europe in which France and Germany would make up the inner "core of the core." The French never formally replied to that proposal. That was "a mistake," says Jean-Pierre Jouyet, the former French Minister for European Affairs who now heads the national stock-market regulatory agency...

Author: /time Magazine | Title: Can France and Germany Fall in Love Again? | 9/26/2009 | See Source »

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