VZCZCXYZ0018
RR RUEHWEB

DE RUEHRL #3355 3261705
ZNR UUUUU ZZH
R 221705Z NOV 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC 6173
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNFRG/FRG COLLECTIVE

UNCLAS BERLIN 003355 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV GM
SUBJECT: NEW-OLD BERLIN GOVERNMENT TO BE FORMED NOVEMBER 
23; FINANCE AND EDUCATION PRIORITY TASKS 
 
REF: BERLIN 2546 
 
¶1. (U) After six weeks of negotiations followed by 
overwhelming endorsements at state-level party conventions, 
Berlin's Social Democrats (SPD) and Left Party.PDS (LP.PDS) 
have announced all the members of the new cabinet (Senat), 
which will be elected by the state parliament on November 23. 
 Despite flirting with the Greens, the SPD decided early to 
opt for a renewal of the coalition with the LP.PDS. 
Governing Mayor Wowereit will return to office and has also 
decided, in a move clearly reflecting personal preferences, 
to take on the cultural affairs portfolio.  Left Party.PDS 
Deputy Mayor Harold Wolf returns to the cabinet as Senator 
(Minister) for Economic Affairs.  In a surprise move, the SPD 
has recruited an Education Senator (Minister) from the West 
-- Juergen Zoellner, now Minister for Education in 
Rhineland-Palatinate (governed by SPD Chairman Kurt Beck) 
will take on the same portfolio in Berlin.  The other members 
of the incoming cabinet are: Justice - Gisela von der Aue 
(SPD); City Development - Ingeborg Junge Reyer (SPD); 
Finance: Thilo Sarrazin (SPD); Interior - Erhart Koerting 
(SPD); Health and Environment - Katrin Lompscher (LP.PDS); 
and Social and Labor Affairs - Heidi Knake-Werner (LP.PDS). 
 
¶2. (U) Zoellner's move to Berlin reflects one of the new 
governments priorities -- restructuring of Berlin's school 
system.  Both parties would like to move towards more unified 
instruction in middle and secondary school, and Zoellner will 
oversee initial projects aimed at bringing all students into 
a unified system until 10th grade.  The other great challenge 
for Berlin's government is financial:  the city's debt stands 
at roughly 61 billion euros and continues to grow.  The city 
lost a recent court case designed to force the federal 
government to increase its financial transfers to the city 
and the LP.PDS has taken a principled stand against 
privatization of the public housing stock -- one way German 
cities have eliminated their debts.  Finance Senator Sarrazin 
is enjoying an unexpected rise in tax revenue, but city debt 
is an issue which could prove very difficult for the new 
government. 
 
¶3. (U) Other priorities in the 88-page coalition agreement 
negotiated between the two parties include:  Economic and 
labor market policy in which the government hopes to take an 
active hand in steering development and boosting public (or 
publicly subsidized) employment, especially for low-skill 
workers; and integration of minorities, with a particular 
focus on early education and language development.  The draft 
budget included in the agreement forecasts a rise in city 
debt to 65 billion euros in 2010, though with a significant 
decrease in the rate of growth of new debt. 
TIMKEN JR