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Germany's top parties reach deal on Merkel coalition

08 February, 2018, 09:24 | Author: Priscilla Morrison
  • Confidence grows for deal on new Merkel government

The two political parties seeking to form Germany's next government want big companies to pay more tax, according to a coalition agreement whose text singled out USA tech giants by name.

Chancellor Angela Merkel's center-right Christian Democrats have reached a power-sharing agreement with their center-left rivals, the Social Democratic Party, or SPD.

That will be relief to the German Chancellor, whose earlier talks with two smaller parties collapsed past year leading her back to her old ally.

At stake for Merkel is whether she leads a stable coalition into her fourth term or risks a fragile minority government or new elections.

Deutche Welle reports: "Early reports suggested that the SPD would be handed the Finance Ministry - a major gain for the Social Democrats - while CSU leader Horst Seehofer, one of the most conservative figures on Merkel's side, would become Interior Minister".

Social Democrats will also get the ministries of labour and social affairs, justice, as well as foreign affairs for Martin Schulz, Merkel's opponent in the elections last September.

The coalition deal must be approved by the SPD's 463,000 rank-and-file members, many of whom bristle at the prospect of enabling yet another star turn for Merkel in Germany and overseas.

Now that the participating parties have done the heavy lifting of establishing all the details of the deal, the next step is for the SPD to put the agreement to a vote among its roughly 440,000 members, which the party has said it will do within the next three weeks.

Martin Schulz leader of Germany's SPD party

The powerful finance ministry has been handed to the country's main centre-left party, the Social Democrats, in an agreement aimed at ending months of political gridlock.

While Merkel sets policy guidelines for the government as chancellor, SPD-led finance and foreign ministries will allow Schulz to make good on his pledge to deepen euro-area cooperation and reach out to France's Emmanuel Macron, who says the 19-country currency bloc should have a joint budget and finance minister.

The finance ministry has been attributed to the SPD, with Hamburg's mayor Olaf Schorf being the favourite for the post, also as vice-chancellor.

This could prove hard after swathes of young, disillusioned Germans joined the party in recent months in a bid to stop the SPD entering their third "grand coalition" with Merkel since 2005.

The two blocs had aimed to strike a deal on Sunday, but extended that deadline as they grappled with reforms to health insurance reform and employment policy demanded by the SPD, which promised members it would negotiate until the conservatives squealed.

The yes-or-no referendum will be held by postal ballot, with the result expected to be announced around March 4.

But debates at European Union level are likely to still depend on priorities and personalities within the grand coalition's parties.

A recent Insa poll found that support for the CDU/CSU had fallen from 33 to 30.5 per cent, while the SPD slipped from September's historic low of 20.5 per cent to 17 per cent.


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