After months of unprecedented wrangling, German politicians have finally agreed a new government that promises universities welcome funding stability and inflation-busting increases in research budgets for years to come.

But university leaders expect this largesse to come with strings attached, potentially ushering in much greater scrutiny of graduate outcomes and even ¡°peer review¡± of teaching.

The coalition agreement between?Angela Merkel¡¯s conservatives and the Social Democratic Party commits to protecting the?so-called ÖйúAƬ Pact ¨C more than €20 billion (?17.8 billion) of federal funding that started in 2007 and was set to run out in 2023?¨C that has enabled a dramatic expansion in German student numbers.

Yet quantitative and qualitative measures will be used to judge eligibility for federal funds, according to the coalition agreement, with student employability a key measure.

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German universities?last year?lobbied heavily against a proposal?that could have seen them compete for funds on the basis of their teaching, arguing that teaching quality was hard to compare.

Wolfgang Herrmann, president of the Technical University of Munich, told?Times ÖйúAƬ?that teaching was harder to measure than research ¡°because a convincing personality may overrule a medium-quality lecture¡±.

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But he said: ¡°I think one has to approach the peer review model in teaching as well, to be frank.¡±

¡°How this can be managed with 177 study courses at this university, I don¡¯t know yet,¡± Professor Herrmann cautioned, but added that a pilot programme ¡°will be necessary to find out the appropriate way¡±.

Addressing teaching quality was essential because it had long been ¡°underestimated¡± in German universities, he added.

Bernd Huber, president of LMU?Munich, said that ¡°the government will demand from universities some key indicators are improved over time¡±,?such as employability or the retention rate of students.

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Universities will therefore have to ¡°adapt our programmes¡± to ¡°make sure we meet these targets¡±, he added.

Meanwhile, in research, the coalition will continue with annual budget increases of ¡°at least¡± 3 per cent for the German Research Foundation, which in 2016 distributed more than €1 billion in competitive individual grants, and for networks of non-university research institutes, such as the Max Planck Society.

Martin Stratmann, the society¡¯s president, welcomed the commitment. ¡°We all would like to have more but, for us, stability is at least as important as absolute growth in numbers,¡± he said.

¡°It¡¯s a general goal of German politicians to invest in science and education...I do not see major differences¡± between parties, he added.

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Institutions will also be set ¡°binding targets¡±?for gender representation,?according to the?, while the Excellence Initiative, designed to?build up?world-leading peaks of top research, will be continued.

But the new coalition has thrown up one surprise ¨C Anja Karliczek, an all-but-unknown new science minister from Ms Merkel¡¯s Christian Democratic Union. Unlike her predecessor Johanna Wanka, a former professor of engineering mathematics, Ms Karliczek¡¯s educational background is far more vocational ¨C she trained as a bank teller and in hotel management before completing a distance degree in business administration later in her career.

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david.matthews@timeshighereducation.com