BERLIN (REUTERS) - Germany took a first decisive step on Wednesday (Sept 27) towards forming a new government when its veteran finance minister, conservative Wolfgang Schaeuble, agreed to become president of the parliament, clearing the way for another party to take his job.
Chancellor Angela Merkel will hope that Schaeuble, deeply respected in Germany for helping to steer the euro zone through its debt crisis, can stamp his authority on a fractious Bundestag lower house that comprises six parties after Sunday's federal election.
Merkel must assemble Germany's first three-party coalition since the 1950s after her conservatives lost support and a far-right party, the anti-immigrant Alternative for Germany (AfD), entered parliament for the first time in half a century.
Schaeuble, 75, who emerged as one of Europe's most influential politicians during the euro zone crisis, would bring unprecedented weight to the role of Bundestag president, normally a low-profile position.
His willingness to quit as finance minister after eight years in the post makes it easier for the pro-business Free Democrats (FDP) to join a Merkel-led coalition. The FDP, who are as fiscally hawkish as Schaeuble, have said they want his job.
"As an outstanding personality Wolfgang Schaeuble possesses a natural authority that is of particular importance in these times," said FDP leader Christian Lindner, himself seen as a likely successor at the finance ministry.
Carsten Schneider, the parliamentary group leader of the main opposition Social Democrats, told the Mitteldeutsche Zeitung newspaper that his party would also back Schaeuble, meaning his election is virtually guaranteed.
Criticised in southern Europe, especially Greece, for his insistence on tax hikes and spending cuts at a time of deep recession, Schaeuble is popular at home for balancing the books and presiding over an era of high growth and low unemployment.
Parliamentary sources said interior minister Thomas de Maiziere would take over as Germany's interim finance minister as soon as Schaeuble was confirmed in his new office.
FDP COOLER ON EUROPE
The Free Democrats, with a voter support base among Germany's small and medium-sized businesses, are as committed to budgetary discipline as Schaeuble but less pro-European, meaning Wednesday's news drew a mixed reception from the euro zone.
"I don't think there will be radical changes in German economic policy if the FDP replaces him," said one official close to euro zone policy-making. "The FDP are also hardliners on deficits."
But another euro zone official said the euro zone was losing "one of the most pro-European politicians I know" and instead getting a party markedly cooler on political integration.
Merkel emerged from Sunday's election a weakened figure after her conservatives, still the largest bloc in the Bundestag, bled support to the AfD. But the exit of Schaeuble, the most powerful counterweight to the long-serving Chancellor, could paradoxically strengthen her position.
A deal with the FDP and the Greens is Merkel's only realistic coalition option, but the parties disagree on issues including energy, taxation, Europe and migration, complicating the path to a so-called "Jamaica" coalition - a reference to the parties' respective colours: black, yellow and green.
As Bundestag president, Schaeuble will not be involved in coalition negotiations, removing one strong-minded negotiator from the table and potentially giving Merkel a freer hand.
But Schaeuble, the longest serving member of the Bundestag and the only German politician with a stature comparable to Merkel's, will technically outrank her in the state hierarchy.
The president of the Bundestag ranks second after the president of the republic and ahead of the Chancellor.
