Once again she has turned up late to her place in the history books. It took three weeks before a deal could be ironed out to give Merkel the prize of Germany’s top job. The agreement sees her centre-right Christian Democrats (CDU) form a coalition with ex-Chancellor Schröder’s, Social Democrats. It is seen as the first "grand coalition" of left and right in nearly 40 years.

Last week, Merkel named her Cabinet in what she calls her "coalition of new possibilities". However it is more likely to be a coalition of improbabilities, with many key jobs going to rivals and the opposition.  

In agreeing to form a coalition government, ex-Chancellor Schröder extracted a heavy price from Merkel, with his party taking control of eight important Ministries: Foreign, Finance, Justice, Labour, Health, Transport, Environment and International Development. This is two more than the CDU who take the Defence, Interior, Agriculture, Families and Education Portfolios as well as Chancellor and Leader of the Parliament.

Most commentators believe that Merkel’s radical reform programme will be ditched as the bitter rivals fight it out over whose policies to implement. Many of Merkel’s pre-election commitments are therefore likely to be watered down. Merkel had, for example, campaigned for radical reform of Germany's powerful unions, rigid labour laws and antiquated tax system. She had campaigned to increase VAT and help Germany’s five million unemployed.

Merkel no longer has the political power or public mandate for such reforms. Many of Germany’s voters were believed to have been worried by her neo-liberal policies and scared by comparisons to ex-British Prime Minister Maggie Thatcher. She had been dubbed “Germany’s Maggie” or “Maggie Merkel”.

Merkel’s weakened political position will mean that she will not become “Maggie Merkel” overnight. However, there are signs that Merkel could instigate policies that Maggie Thatcher would have approved of. We should all fear even a weakened Merkel, and underestimate her at our peril.   

The first reason is Germany’s relationship with America. Although Schröder’s Social Democrat party will still control the Foreign Ministry and hence continue Germany’s opposition to the war in Iraq, Merkel will be looking to cement a special transatlantic alliance between herself and President Bush.

German conservatives have long yearned for the same type of “special relationship” that Britain currently enjoys with the US. They are said to be looking for a “climate of trust” between the two nations. In short, Merkel is seeking the kind of close partnership that existed between Maggie Thatcher and then President Reagan, or Tony Blair and President Bush.

The signs of her pro-Bush views are already there. During her election campaign, Merkel repeatedly distanced herself from Schröder’s stance on Iraq. She also expressed support for Bush’s Iraq policy both before and during the war. “It is wrong to separate the issues of terrorism and Saddam Hussein,” she said. “We need to see things from the perspective of the United States”.

Any further support from Europe for Bush’s foreign policy is worrying.  It is bad enough to have Blair backing Bush, without another large European country. It could embolden Bush to act against Iran or even North Korea. It could mean that Bush tries to argue that Europe is behind him on these issues because we are not.

The second issue is nuclear power that generates about a third of Germany’s electricity. Gerhard Schröder was in a coalition government with the German Green party. Because of the Green’s influence, in 2001 Germany became the first leading economic power to announce its intention to completely phase out the use of nuclear energy by 2020.They announced a huge investment in renewable energy.

In the run up to the election, Merkel’s manifesto pledge was to reverse the decision to close the nuclear reactors and extend the length of their operation by eight years at least, but in all probability it could be much longer.

Last week, the Financial Times reported how the nuclear lobby, although disappointed with Merkel’s weak political victory, was still hoping to influence the new government's policy agenda while it is in a state of flux. If nuclear power makes a political come-back in Germany, it will have ramifications in the UK, as Britain wrestles over whether to build new nuclear power stations. It will also have ramifications in the Middle East, where the EU is still in a political stalemate with Iran over its nuclear programme.

The third issue is the genetic modification of crops. Just as the Greens in the Schröder’s old coalition were holding back nuclear development, so they were against the commercialisation of Genetically Modified (GM) crops. GM crops have unknown health risks to humans and known ecological risks such as cross-contamination of natural species with the creation of “super weeds”.

Last year, Germany passed a law on GM crops that included provisions to make companies or farmers liable if they polluted their neighbour’s crops.  It was seen as a victory for Renate Kuenast, Germany’s Consumer Protection Minister, who was a Green Party member of Schröder’s government.  

Pro-GM opponents hated the law, which they argued would block research. Along with other EU countries, Germany also banned America’s GM corn, due to the lack of labeling of GM products and transparency.

Because of its anti-GM stance, Germany faced legal action from the American giant GM company, Monsanto, trying to force the country to approve their GM maize for cultivation. Schröder’s Coalition government faced the threat from German chemical giant BASF to relocate research into genetic engineering to other countries if Germany continued to restrict research and development into GM.

In a newspaper article, Kuenast argued that Europe had learned from the mistakes of the past such as the agricultural disaster, BSE (mad cow disease) in the nineties and foot and mouth disease that hit Britain in 2001.

BSE and foot and mouth had cost “farmers and the EU billions” argued Kuenast. “As a consequence we introduced transparent rules both in Berlin and Brussels that are easy to monitor. Ever since, consumer protection has had top priority”. Consumer protection used to be a priority. But not anymore.

With the Greens out of power, things will change. Merkel is seen as rabidly pro-GM. Moreover, the change of the German government also changes the politics at the Council for Europe. In the last few years Germany had been mainly abstaining on key votes on whether to commercialise GM crops. Now it looks like Germany will say yes.

Consumer protection groups worry that this could shift the balance of power in Europe away from the nations that were wary of GM to those in favour. The change of German government could have repercussions across Europe and mean that GM is more widely adopted, despite the views of tens of millions of consumers who do not want to eat it. Monsanto and their friends in the White House must be rubbing their hands with glee.   Merkel may be the hammer that finally breaks the hard nut of consumer resistance across the EU.

So Merkel is pro-war, pro-nuclear and pro-GM – three reasons to be extremely wary of her. As Merkel finalises her government, political commentators are wondering how long the coalition will last. In theory Merkel could be Chancellor for four years, but her Coalition could collapse much sooner. Last week the German magazine Der Spiegel wrote that “Angela Merkel will preside over her cabinet like a lion tamer in a circus ring. She can be eaten." Let’s hope she gets eaten as soon as possible.