Merkel Sees Tough Fiscal Choices; Germans Split on Economic Outlook

BERLIN -- The effects of the financial crisis aren't over yet and in fact will continue for the next two years, making fiscal policy "incredibly difficult" for the new government, Germany's Chancellor Angela Merkel said Monday.

"I am fully convinced that not only the year 2010 but also the year 2011 will be very strongly marked by this crisis," Chancellor Merkel told party followers.

Her Christian Democratic Union party reached a policy agreement for a coalition government over the weekend with their sister party, the Bavarian Christian Social Union, and the Free Democratic Party.

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