On the domestic front, the government are planning to slash taxes, even if it means plunging the national debt to perilous depths. In the international arena, they have already announced plans to cement ties with Poland and France, as well as steps toward landing a permanent seat on the UN Security Council. These are the priorities of the new German government: let’s explore their ramifications for Poland and Europe as a whole.

1. Europe’s dwindling coffers

Germany, like most EU countries, is sunk deep in debt. This is the news that worries Europe most. “That means Germany won’t be donning its EU Santa Claus costume again any time soon to dole out European handouts,” forecasts Thomas Klau, an analyst at the European Council on Foreign Relations (a pan-European think tank). Under the influence of her new coalition partners, the FDP free-market liberals, the chancellor has had to give in to the idea of tax cuts. The bottom line: the national debt will grow by another 5% of GDP in 2011.

In view of the recent constitutional amendment requiring the government to tackle the budget deficit, a thoroughgoing austerity policy is bound to be in the offing. “A Germany that balks at every cent spent does not bode very well for the next round of EU budget talks for 2014–2020,” underscores Thomas Klau. Germany, the biggest contributor, will want a small budget. Poland, the chief beneficiary of European aid, will want the opposite. The CDU/CSU (Christian Democratic Union/Christian Social Union) and FDP (Free Democrats) coalition have already announced that the cost-cutting will mainly affect regional spending. But Polish farmers – and those elsewhere in the Union, for that matter – have nothing to worry about: thanks to unrelenting pressure from the Bavarian CSU, which traditionally represents Germany’s rural electorate, there won’t be any major changes in the agricultural domain.

2. No to protectionism and no European tax

In their coalition deal, Angela Merkel and Guido Westerwelle’s government repeatedly eschew protectionism and solemnly swear to abide by EU competition rules. The power-sharing coalition aim to press ahead with the liberalisation of the European market, and have ruled out the idea of a European tax that Gerhard Schröder fought for a few years back. On the other hand, the advocates of a strong Europe in the international arena are delighted with the CDU/FDP’s outright support for the Lisbon Treaty.

3. Reaching out to Poland

France and Poland, the only European partners mentioned in the coalition agreement, will be Germany’s key allies over the next four yeas. That seems perfectly normal as far as France is concerned, but more surprising with regard to Poland – and it goes to show that government elites in Berlin believe in breathing new life into cooperation tools like the Weimar Triangle. “The possibility of bolstering its alliance with the main EU players is a chance not to be missed for Warsaw,” stresses Gunther Hellmann, a political scientist at Frankfurt University.

4. More room for manoeuvre in Russian relations

Maintaining good relations with Russia remains a top priority of German diplomacy. Berlin will not relinquish its support for companies doing business with the Eastern goliath. The coalition agreement, however, does include several provisions that show Angela Merkel has learned some lessons from Gerhard Schröder’s too overtly Russophilic stance. The new government’s determination to backtrack on the nuclear phase-out law negotiated by the Social Democrat/Green administration in 2000 is bound to have an impact on relations with Russia. By banking on nuclear power, Germany would reduce its dependence on Russian gas for a while. “Atomic is only a temporary solution though. Real diversification will necessarily involve petrol and natural gas from Central Asia and the Caspian Sea region. We’ve got to make the most of the next four years to develop these channels,” regional expert Rainer Lindner told us.

5. Berlin is ready to join the major league

“We want to play an active part in the alliances of which we are members,” it says in the coalition agreement. Berlin’s desire to take a permanent seat on the UN Security Council runs right along these lines. This is one of the few ideas chancellor Merkel has co-opted from Gerhard Schröder. However, Germany would be willing to forego that option if the EU were to apply for a common European seat. Still and all, it is hard to imagine the UK and France leaping into that breach.