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Crisis talks as Merkel’s coalition suffers new blow

Parties in German Chancellor Angela Merkel's government are set to hold separate crisis talks on Monday, after her fragile coalition suffered a fresh blow as the leader of junior partner SPD quit.

Crisis talks as Merkel's coalition suffers new blow
Chancellor Angela Merkel and Andrea Nahles talk in March 2019. Photo: DPA

In a shock announcement on Sunday, centre-left Social Democratic Party (SPD) leader Andrea Nahles said she was stepping down from her party's top jobs following late May's European elections drubbing.

The 48-year-old's decision left the SPD in disarray, and raised questions over the survival of Merkel's coalition.

Whether the unhappy partnership between Merkel's centre-right Christian Democratic Union and its sister party the Christian Social Union (CDU/CSU) alliance and the SPD can go on until the end of its term in 2021 could now hinge on Nahles' successor.

Anxious to calm the jitters over her government, Merkel said on Sunday that it will push on and fulfil its mandate.

“What I want to say for the government is that we will continue with our work with all seriousness and with great responsibility,” the veteran leader said in a statement to the press.

The leadership crisis at the SPD could not have come at a worst time for Merkel's CDU, which was itself struggling to halt a haemorrhage of voters as the younger generation ditched it in droves for the Greens.

READ ALSO: Why can't Germany's Social Democrats pull themselves together?

Voices are growing louder within the coalition for the parties to part ways.

Harald Christ, deputy chief of the SPD's economy forum, warned that “Nahles stands for the existence of the GroKo – whose stability is now in question.”

“In my view what comes next is the end of the GroKo – everything else leads nowhere,” he told Bild daily.

The deputy leader of the CDU-CSU alliance, Carsten Linnemann also warned in an interview with RedaktionsNetzwerk Deutschland that “if we are unable to progress with the SPD, then we should draw a line under this and ask ourselves if continuing with the GroKo still makes sense.”

Crisis to crisis

The alliance between Merkel's Christian Democrats and the SPD was fragile from the start.

Wounded by an election rout in 2017, the SPD had initially sought to go into opposition, but was reluctantly coaxed into renewing a partnership with Merkel.

Many within the party however remained wary of continuing to govern in Merkel's shadow, and the coalition has lurched from crisis to crisis.

The SPD, Germany's oldest party, had initially planned to re-examine the alliance in the autumn — half-way through the four-year mandate.

READ ALSO: The winners and losers: Six things to know about the EU election in Germany

But with a free-fall in its ratings unending, the SPD's timetable may yet be accelerated.

After last Sunday's European election, the SPD has been staring at the prospect of another debacle in three upcoming state polls in Saxony, Brandenburg and Thueringia, where the far-right AfD is poised to make
significant gains.

With its anti-immigration campaign, the AfD in 2017 drew voters angry with Merkel's decision to let in more than a million asylum seekers into Germany.

But it is now the Greens which may have become the biggest headache for the SPD.

READ ALSO: 'Surfing the Zeitgeist': How the Greens won over Germany

While sharing the centre-left position on the political spectrum, the Greens are proving more attractive to young voters because of their environmental platform.

In a national survey released Saturday, the Greens came in top for the first time – enjoying more support than Merkel's CDU-CSU alliance. The environmental group had a lead over the SPD of around 15 percentage points.

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POLITICS

Germany plans return to debt-limit rules in 2023

Germany will reinstate its so-called debt brake in 2023 after suspending it for three years to cope with the impact of the coronavirus pandemic, sources in the finance ministry said Wednesday.

Germany plans return to debt-limit rules in 2023

The government will borrow 17.2 billion euros ($18.1 million) next year, adhering to the rule enshrined in the constitution that normally limits

Germany’s public deficit to 0.35 percent of overall annual economic output, despite new spending as a result of Russia’s war in Ukraine, the sources said.

The new borrowing set out in a draft budget to be presented to the cabinet on Friday is almost 10 billion euros higher than a previous figure for 2023 announced in April.

However, “despite a considerable increase in costs, the debt brake will be respected,” one of the sources said.

Although Germany is traditionally a frugal nation, the government broke its own debt rules at the start of the coronavirus pandemic and unleashed vast financial aid to steer the economy through the crisis.

READ ALSO: Debt-averse Germany to take on new borrowings to soften pandemic blow

The government has this year unveiled a multi-billion-euro support package to help companies in Europe’s biggest economy weather the fallout from the Ukraine war and sanctions against Russia.

Berlin has also spent billions to diversify its energy supply to reduce its dependence on Russia, as well as investing heavily in plans to tackle climate change and push digital technology.

But despite the additional spending, Finance Minister Christian Lindner has maintained the aim to reinstate the debt brake in 2023.

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