German leader forges coalition agreement

BERLIN — Chancellor Angela Merkel on Saturday finished building a new center-right government for Germany and announced an overhaul of the health care system, more help for families, and tax cuts of up to 24 billion euros over the next four years.

Merkel said the coalition of her Christian Democrats, their Bavarian sister party the Christian Social Union and the pro-business Free Democrats are capable of solving the country's problems following their victory in last month's parliamentary elections.

Guido Westerwelle, the leader of the Free Democrats, said at a joint news conference with Merkel that the coalition agreement was "a great compass for our country."

He added that he wants all nuclear weapons to be pulled out of Germany — an issue that may prove vexing to the country's NATO allies, including the United States. Merkel made no immediate pledge on that issue.

The coalition agreement is expected to be approved and signed on Monday.

The chancellor announced some new members of her new Cabinet, while Westerwelle said he would present the Free Democrats' ministers to his party first and announce them later in the day to the public.

Westerwelle himself is expected to take over the posts of foreign minister and vice chancellor.

Merkel said that current Economy Minister Karl-Theodor zu Guttenberg will become the defense minister tasked with handling Germany's unpopular mission in Afghanistan. He replaces Franz Josef Jung, who is to take over at the Labor Ministry.

Ahead of the Sept. 27 elections, both parties advocated tax cuts in an effort to spur economic growth. However, they differed on how far to go at a time when efforts to combat the economic crisis have pushed up debt.

A cornerstone of the coalition agreement is reform to the nation's health care system. It is expected to include a freeze on employers' contributions, meaning individuals will carry the burden of any cost increases.