Schröder retains influence in Merkel's government

As details of her new cabinet's make-up emerged yesterday, it became clear that Ms Merkel will have to try to rule Germany with leading figures from the opposition Social Democrats in many of the government's key posts.

The cabinet is certainly not the mistral of change Ms Merkel promised she would blow through the Fatherland if she were elected. It is more like an old-boys' club of Gerhard Schröder's friends and supporters who will be around to do their ex-master's bidding long after he retires.

The price of a power-sharing deal for Ms Merkel to govern Germany as the first female Chancellor has been to hand over key ministries to the SPD. Yesterday, familiar names and faces were given to many of those slots.

Frank-Walter Steinmeier, 49, Schröder's chief of staff since 1999 and a relative unknown on the national political scene, was chosen by the SPD on Thursday to fill the post of Foreign Minister currently held by Joschka Fischer. Peer Steinbrück, 58, a former premier of North Rhine-Westphalia, as well as a good friend of Mr Schröder's, replaces Hans Eichel as Finance Minister.

Franz Münterfering, head of the SPD who took the party on a left-turn after it lost the key state of North Rhine-Westphalia after nearly 40 years in power, becomes Vice-Chancellor and also Labour Minister.

Other SPD members of the cabinet include Ulla Schmidt and Brigitte Zypries, who will remain as health and justice ministers respectively. Sigmar Gabriel, a former premier of Lower Saxony, becomes Environment Minister, and Wolfgang Tiefensee, Mayor of Leipzig, is to become Transport Minister. Again, all are friends of their outgoing mentor Mr Schröder.

Neither the conservatives nor the SPD won enough support in last month's election to form a government with their preferred partners, forcing them into coalition talks with each other.

Already economists are predicting a wipe-out for Ms Merkel's promised reforms of the tax system, labour markets and union power. The SPD, with power over several important departments, will dictate both the pace and structure of any reforms.