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Merkel Lists Stable Euro First in Unveiling Third-Term Agenda

Chancellor Angela Merkel pledged to work for a stable euro area and push ahead with Germany’s shift to renewable energy as she outlined her third-term plans.

Merkel, who needs a coalition partner to govern after winning elections on Sept. 22, also listed demographic change in Europe’s biggest economy and financial relations between Germany’s 16 states and the federal government among her four priorities for the next term. She paired her agenda with a nudge to the opposition Social Democrats to move forward in coalition talks tomorrow with her Christian Democratic bloc.

“I want a stable euro area,” Merkel told a meeting of the IGBCE labor union in Hanover today. “Europe should emerge strengthened from the crisis.” Sticking to the line she has pursued throughout the debt crisis, she said the aim is to boost competitiveness across the 17-nation euro area.

Merkel’s comments to the mining, energy and chemical-industry union marked her first policy speech since winning the biggest election victory since German reunification. The chancellor, in office since 2005, needs a new coalition partner after her second-term ally, the Free Democrats, failed to win any parliamentary seats in last month’s vote.

On energy, Merkel drew applause when she said “we want to expand renewable energies but it has to happen in a way that doesn’t endanger Germany’s industrial base.”

She gave her most explicit backing yet to counter the oversupply of emissions certificates in the European Union’s carbon market, an emergency fix known as back-loading. “We need a certain degree of back-loading of CO2 emissions so certificate prices return to a sensible level,” Merkel said.

To contact the reporter on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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