WESTERN EUROPE

MERKEL TO BECOME CHANCELLOR

BERLIN – Conservative Angela Merkel struck a power-sharing deal yesterday that will make her the first woman and politician from the ex-communist east to serve as Germany’s chancellor, forging a coalition with ousted leader Chancellor Schroeder’s party to reform the faltering economy.

The country’s two biggest political forces were forced into talks on forming a joint government after a Sept. 18 election gave Ms. Merkel a victory – but with a margin so slim Mr. Schroeder’s party demanded equal treatment in a “grand coalition.” To resolve the impasse, the Social Democrats gave up Germany’s leadership, but the party secured the bulk of the ministries, including the prestigious Foreign Ministry.

Both sides agreed to start formal negotiations on a new government next Monday. Mr. Merkel said both sides aim to complete them by November 12, after which they will need endorsement by party conventions. Under the terms of the agreement, the Social Democrats would head the foreign, finance, labor, justice, health, transport, environment and development ministries. Ms. Merkel’s Christian Democrats and her sister party, Edmund Stoiber’s Christian Social Union, would get the economy, defense, interior, agriculture, family and education portfolios. With Ms. Merkel as chancellor and her chief of staff also a Cabinet-level post, the two sides would have equal representation at the Cabinet table. The parties have the right to propose their ministers.

– Associated Press

ISRAELI, AMERICAN SHARE ECONOMICS NOBEL

STOCKHOLM, Sweden – Israeli-American Robert Aumann and American Thomas Schelling won the 2005 Nobel Memorial Prize in Economic Sciences yesterday for their work on game theories that help explain political and economic conflicts from arms races to price wars.

Mr. Schelling, 75, is a professor at the University of Maryland’s department of economics and a professor emeritus at Harvard. Mr. Aumann, 84, is a professor at the Center for Rationality at the Hebrew University of Jerusalem.

It was the sixth straight year that Americans have won the prize, or had a share in it. Messrs. Aumann and Schelling were cited for using game-theory analysis to “explain economic conflicts such as price wars and trade wars, as well as why some communities are more successful than others in managing common-pool resources.”

– Associated Press

CENTRAL EUROPE

CANDIDATES PREPARE FOR RUNOFF

WARSAW, Poland – Pro-market lawmaker Donald Tusk won more votes than conservative Warsaw Mayor Lech Kaczynski in the final count of Poland’s presidential election, but fell short of a majority needed for an outright victory in a first round of balloting.

Mr. Tusk, the smooth-mannered deputy parliament speaker, had 36.3% of the votes from Sunday’s election, while the outspoken Mr. Kaczynski had 33.1%.

– Associated Press

PERSIAN GULF

INSURGENTS LAUNCH ATTACKS AHEAD OF REFERENDUM

BAGHDAD, Iraq – Insurgents launched a new salvo of attacks five days ahead of a crucial constitutional referendum, killing at least 18 Iraqis and an American soldier yesterday with suicide car bombs, roadside explosives, and drive-by shootings, police said.

Five mortar shells were fired at a hotel in the southern city of Hillah where an American regional embassy office is based, with one round hitting the building and leaving a large hole in a wall, police said. No casualties were reported.

Gunmen also opened fire on a convoy of cars carrying members of an Arab League delegation that is visiting Iraq, but no one was hurt, police said.

The attacks came as Shiite and Kurdish officials continued to negotiate with Sunni Arab leaders over last-minute additions to the constitution, trying to win Sunni support ahead of Saturday’s referendum. American officials were acting as mediators.

– Associated Press