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Merkel clinches hard-fought deal on new government

Thursday, February 08, 2018

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BERLIN, Germany (AFP) — German Chancellor Angela Merkel's conservatives and the Social Democrats sealed a deal on a new coalition yesterday, potentially ending four months of political deadlock in Europe's top economy.

Following days of marathon negotiations, a relieved Merkel told reporters the agreement would create “the good and stable government that our country needs and that many in the world expect from us”.

After extracting several hard-fought concessions in the final spurt, Martin Schulz said he was stepping down as leader of the centre-left Social Democratic Party (SPD) and wanted to become foreign minister in the new government.

The coalition breakthrough will come as a relief to Germany's EU partners as the bloc faces tough negotiations on migration and Brexit.

Merkel, Europe's most experienced leader, has seen her standing at home and abroad weakened by the longest stretch of coalition-building in the country's post-war history.

But before she can be sworn in, a final hurdle looms: The “grand coalition” pact between her CDU/CSU bloc and the SPD must still be approved by the SPD's 460,000 members in an upcoming postal ballot.

Germany has been stuck in political limbo since September's inconclusive general election saw mainstream parties bleed support to the far-right AfD, which tapped into anger over Merkel's liberal refugee policy.

After a failed attempt to forge an untried alliance with two smaller parties, Merkel opted to woo back the reluctant SPD — her junior partner for two of her three terms since 2005.

Schulz responded by abandoning his post-election vow to renew the party in opposition — a U-turn that angered many.

But a copy of the coalition agreement obtained by AFP indicated that he was able to extract a high price from the conservatives in the final round of talks including control of the powerful finance and foreign ministries, as well as the labour, family affairs, justice and environment portfolios.

Julian Reichelt, editor-in-chief of the influential Bild daily, called it “the first SPD government led by a CDU chancellor”.

Merkel admitted the debate on the division of ministries “wasn't easy” while Schulz held up the coalition deal as bearing “the strong signature of the Social Democrats”.

Former European Parliament chief Schulz said he intended to take over the foreign ministry and was giving up the SPD leadership after just over a year in the role.

He tapped the SPD's popular parliamentary group leader Andrea Nahles as his replacement.

“The party has to become younger and more female,” he told reporters, flanked by Nahles.

Meanwhile the finance job could go to the popular mayor of northern port city Hamburg, pro-business centrist Olaf Scholz, often eyed as a potential SPD chancellor candidate.

The change could mean a mild shift away from the austerity imposed at home and abroad by former finance minister Wolfgang Schaeuble, although the parties agreed to stick to a balanced budget policy.

But before anyone can take up their posts in a new Merkel-led cabinet, the SPD's rank and file have to give their blessing to the coalition pact.

Observers expect the vote to be tight, with the SPD's left and youth wings fiercely opposed to another four years governing in Merkel's shadow.

The outcome of the yes-or-no referendum is expected on March 4.

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