Merkel and SPD agree on coalition talks

Chancellor Angela Merkel and her defeated election rivals the Social Democrats agreed on Thursday afternoon to launch formal talks aimed at building a left-right "grand coalition" government, according to media reports.

Merkel and SPD agree on coalition talks
Photo: DPA

Almost a month after the elections, the leaders of Merkel’s CDU, her Bavarian allies the CSU and the centre-left party the SPD, struck the agreement in their third round of exploratory talks, the Bild newspaper and national news agency DPA said, citing delegation sources.

Merkel’s conservative bloc comfortably won the elections on September 22nd but fell just short of a majority meaning they need to find an ally to govern with.

Their previous coalition partner, the Free Democrats (FDP), failed to get five percent of the vote needed to return to parliament.

That left Merkel with the choice of either forming a “grand coalition” with Germany’s second biggest party, the SPD or teaming up with the Green Party.

Exploratory talks between the conservatives and Greens broke down on Tuesday night, leaving the path open for a “grand coalition”.

But the SPD will be seeking every advantage it can from Merkel before officially forming a new government. Its last taste of coalition with the chancellor from 2005 to 2009 left it trailing in the polls.

A minimum wage?

The Social Democrats have made introducing a nationwide minimum wage of €8.50 an hour one of the cornerstones of any coalition agreement.

Merkel says this would cost jobs and favours traditional negotiations between employers and unions that work out different wage deals by industrial sector and geographic region.

CSU chief Horst Seehofer has declared he may accept a minimum wage in return for no tax rises.

A compromise could be an in-principle agreement on a minimum wage, but with the level determined by a committee of unions and employers.

The SPD also wants to open more child-care centres to help working families and rejects as outdated and sexist a state benefit critics call the “stove bonus”, for parents who care for toddlers at home. But the programme is a flagship policy of Bavaria’s CSU, which wants to keep it.

The Social Democrats have also called for equal tax and adoption rights for same-sex couples and a women’s quota in corporate boardrooms.

Seehofer signalled he may soften his opposition to another SPD demand – allowing dual citizenship. This would especially help the children of millions of Turkish and other immigrants who must now decide when they reach adulthood whether to take German or their ancestral citizenship.

Where to compromise?

The ideological and policy differences between the parties which stand in the way of any coalition agreement, will force both sides to haggle and hammer out compromises.

To fund badly needed investment in infrastructure, education and welfare, the SPD says €80 billion must be spent per year, which it wants to finance with higher taxes for the rich.

Conservatives have pledged to resist this at a time of record-high tax revenues and say there is enough money in the public purse to finance state


SPD leader Sigmar Gabriel has said that a tax rise is “not an end in itself” if other solutions can be found.

The CSU, against CDU opposition, also wants to introduce highway tolls for foreign motorists.

But on foreign and eurozone policy, the big parties are much closer, and the SPD in opposition supported all of Merkel’s major policy moves to combat the eurozone debt and economic crisis.

The SPD’s chancellor candidate Peer Steinbrück has called for greater solidarity with crisis-hit countries where youth unemployment has soared, and recalled that after World War Two Germany received aid and debt forgiveness from its former foes.

However, on concrete measures, the parties basically agree to keep supporting recession-hit countries in return for economic reforms and to

consent to a third bailout plan for Greece.

On Germany’s ambitious energy transition away from nuclear power and toward renewables such as wind and solar, both sides agree that clean energy subsidies must be reduced to lower consumer electricity bills and have stayed sufficiently vague on details to leave the door open to compromise.

READ MORE: CDU softens stance on tax hikes in ally search

AFP/The Local/tsb

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How Germany is reacting to far-right election victory in Italy

While far-right groups have been celebrating, other politicians in Germany see the results as worrying. Here's a look at the reaction.

How Germany is reacting to far-right election victory in Italy

According to initial projections following Italy’s election on Sunday, the coalition led by Georgia Meloni and her radical right-wing Fratelli d’Italia party has won a majority of seats in the two chambers of the Italian parliament and will lead the next government. 

Meloni is a euro-sceptic who has previously spoken about having an “aversion” to Germany and referred to German Chancellor Olaf Scholz as “socialist” while on the campaign trail.

However, Chancellor Olaf Scholz’s deputy spokesman Wolfgang Buechner told reporters on Monday: “We of course have to wait for the official final result from this election but at this time what the chancellor would say is that Italy is a very Europe-friendly country with very Europe-friendly citizens and we assume that won’t change.” 

READ ALSO: What will a far-right government mean for Italy?

A Finance Ministry spokesperson added that Berlin expected the new Italian government to continue to respect the stability pact that sets the fiscal rules for the eurozone.

Despite these reassurances from the central government, German politicians in the EU parliament have expressed concern about the new direction for Italy.  

Rasmus Andresen, spokesman for the German Greens in the EU Parliament, said the “unprecedented Italian slide to the right” will have massive repercussions for Europe and for the European Union.

“Italy, as a founding member and the third strongest economy in the EU, is heading for an anti-democratic and anti-European government.”

Though Meloni no longer wants Italy to leave the eurozone, she has said that Rome must assert its interests more and has policies that look set to challenge Brussels on everything from public spending rules to mass migration.

The Greens’ co-leader in Brussels, Thomas Waitz, told Die Welt that the EU can only function if it sticks together, for example on cooperation in energy markets, decisions on Russian sanctions or dealing with the Covid crisis. “Meloni, on the other hand, would back national go-it-alones. It can be a disaster for Europe,”  he said. 

READ ALSO: Euro falls to 20-year low against US dollar

The FDP’s expert on Europe, Alexander Graf Lambsdorff, takes a similar view. He said on ARD’s Morgenmagazin that cooperation with Italy in the European Union will become more difficult. He said that it will now be much more difficult to achieve unity in Europe, especially on the issues of migration, reform of the Stability and Growth Pact and the single market.

Speaking on RTL, Green Party leader Omid Nouripour called the election results in Italy “worrying” and pointed out that people within the Italian right-wing nationalist alliance have “very close entanglements with the Kremlin”.

“We can’t rule out the possibility that people in Moscow also popped the corks last night,” he said.

Germany’s own far-right party – Alternative für Deutschland (AfD) – has been celebrating the victory. 

AfD member of the Bundestag Beatrix von Storch wrote “We cheer with Italy!” on Twitter late Sunday evening.

Referring to the recent elections in Sweden, where the right was also successful, von Storch wrote: “Sweden in the north, Italy in the south: left-wing governments are so yesterday.”

Her party colleague Malte Kaufmann tweeted, “A good day for Italy – a good day for Europe.”

With reporting from AFP