Leading article: Pragmatism and protectionism

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Considered from the perspective of Germany's domestic priorities, the proposed composition of the new government could have been much worse. The nominations have a consensual feel. This will not bring the sort of rapid reform that advocates of the so-called British model have advocated, but it does mean that stalemate and quarrels may be avoided.

The nomination as Economy and Technology minister of Edmund Stoiber, the CDU/CSU's disappointed candidate for chancellor three years ago, is a sensible use of his strengths, and limits his capacity for mischief-making. As Prime Minister of Bavaria, Mr Stoiber has presided over one of the most successful and job-creating regional economies in the country. Peter Steinbrueck, the SPD's nominee for Finance minister, is a reformer, whose enthusiasm for cutting subsidies could chime with Ms Merkel's instincts for tax-cutting.

Franz Muentefering, the SPD's nominee for Labour minister, gained notoriety for describing some financiers as "locusts" during the keenly fought election in North Rhine-Westphalia. His record, however, suggests a pragmatist rather than an ideologue. As the third member of the economic team, he will probably be less troublesome to Ms Merkel than the "locust" comment might suggest.

Considered from the perspective of the European Union, and specifically of Britain's presidency, however, the new government line-up could have been a great deal better. In particular, the nomination of a Bavarian, Horst Seehofer, as Agriculture minister, shows that Ms Merkel's room for manoeuvre on EU agriculture subsidies will be limited.

A more immediate difficulty is that Germany's outgoing Chancellor, Gerhard Schröder, intends to come to the EU summit on social issues at the end of October. Any hopes Tony Blair or Gordon Brown might have had of "selling" the successes of the British model Europe-wide will be constrained by Mr Schröder's near-victory in the German election on a platform that opposed the "Anglo-Saxon model" and also by the slowing of the British economy.

If Germany's new government is approved, negotiations on EU budget reform could get even tougher. A Merkel government, while moderately reformist at home, could be even more protective of Germany's interests in the EU than was the Schröder government before it.

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