Merkel reveals the wurst-fuelled coalition deal that may save her job

Angela Merkel attends a press conference at the headquarters of Germany's social democratic SPD party in Berlin
Kay Nietfeld  AFP

German Chancellor Angela Merkel's Christian Democrat (CDU) party has decided on a coalition blueprint with the social democrats.

The main hurdle to a rerun of the so-called grand coalition of Germany's two main parties now lies with the Social Democrats, who at first refused to extend their alliance with Merkel after suffering their worst electoral defeat since World War II.

Although the coalition agreement has yet to be formally announced, preliminary reports suggest that negotiators have struck a deal on the outlines of a program, concluding a process which began after last September's inconclusive general election.

"I think we have reached excellent results", said Martin Schulz, SPD leader and ex-European Parliament president.

Dr Merkel wants to conclude negotiations on forming a coalition government by mid-February, a source in her conservative party said on Friday (Jan 12).

Left party chairwoman Sahra Wagenknecht said the deal would perpetuate "blatant social injustice", including Germany's precarious low-wage sector and poverty in old age, while business raked in "gushing dividends".

The hope was to form a new government "before Easter", which falls on April 1, said the CSU's Seehofer.

He reluctantly reconsidered after Merkel's coalition talks with two smaller parties collapsed in November.

Angela Merkel with Horst Seehofer left and Martin Schulz after exploratory talks about forming a new coalition government at the SPD headquarters in Berlin Germany

The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election. The coalition blueprint starts with the topic of Europe and includes pledges to strengthen common European Union foreign and defence policy. The AfD surged into third place in September's election, the first time in decades that a far-right, openly nationalist party had won seats in Germany's federal parliament.

That falls short of conservative demands for maintaining a block on such family reunification, but also is more limited than what the Social Democrats sought.

The parties pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax.

Though most European economies - and the euro - have been in good shape in recent months, the lack of German leadership was threatening to affect Brexit and stall the push for European Union reform, led most vocally by French president Emmanuel Macron.

But he has been forced to wait for months for a concrete response from Merkel, who has come under mounting criticism at home and overseas for her plodding reaction to Macron, aggravated by her struggle to form a new government.

The party leaders agreed to a 28-page deal on Friday morning. Jean-Claude Juncker, the head of the EU's executive Commission, said the European part of the deal was "a significant, positive, constructive future-looking contribution to the European policy".

The SPD's youth wing chief Kevin Kuehnert said he would embark on a national tour to press his case against a new grand coalition, known as "GroKo" in German political shorthand.



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