Angela Merkel has been confirmed as German chancellor for a third term, at the head of a grand coalition, by a vote in parliament.

Her centre-right CDU/CSU bloc fell short of an overall majority in September`s polls and will share power with the Social Democrats (SDP).

The SPD`s membership voted on Sunday to back the coalition with its old rival.

A national minimum wage will be brought in but Germany`s tough stance on fiscal discipline is unlikely to change.

Under the coalition deal signed last month, a minimum hourly rate of 8.50 euros (£7.11; $11.55) will come into force for the first time in 2015.

The new government will be slightly to the left of the previous one, in which the Christian Democrats/Christian Social Union were in coalition with the market-oriented Free Democrats (FDP), the BBC`s Steve Evans reports from Berlin.

But the SPD will form a minority part of the government and no-one doubts that Chancellor Merkel will be in charge, our correspondent says.

As the EU`s most industrialised and populous state, with its biggest economy, Germany dominates decision-making for the eurozone.

New faces


Mrs Merkel received 462 votes out of 621 in the Bundestag (parliament) on Tuesday.

The talks to forge the new coalition were the longest for any German government since since World War 2.

The CDU/CSU and SPD finally signed the deal, a 185-page agreement entitled "Shaping Germany`s Future", late last month.

Mrs Merkel was obliged to turn to the SPD after the FDP failed to win any seats in the 22 September election, falling short of the 5% hurdle to enter the Bundestag.

Trusted Merkel ally Wolfgang Schaeuble will remain finance minister in the new government, one of 10 CDU/CSU politicians in the 16-strong cabinet.

"His name stands for euro stability and I`m glad that he`s continuing," Mrs Merkel said after news of the new line-up emerged.

Other CDU/CSU picks include Ursula von der Leyen as defence minister and Thomas de Maiziere as interior minister.

For the SPD, party chairman Sigmar Gabriel will become economy minister and deputy chancellor, while Frank-Walter Steinmeier will be foreign minister.

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