Merkel Takes Step Toward New Government for Germany

Pauline Gross
January 13, 2018

A blueprint for formal negotiations was agreed between Chancellor Angela Merkel's Christian Democrats (CDU) and their former coalition partners, the Social Democrats (SPD).

The prospective partners have governed Germany together for the past four years but Schulz, Merkel's defeated challenger in Germany's September 24 election, initially said after the Social Democrats crashed to a disastrous result that they would go into opposition.

If the deal jumps that hurdle, official coalition talks will begin in February and a government is likely to be formed in late March if the formal coalition treaty is approved by another SPD member ballot.

SPD Secretary General Lars Klingbeil told party members in a video message the party was striving for improvements in labour, health, education and family policy, and on Europe. "I think we produced excellent results".

"In close partnership with France, we want to sustainably strengthen and reform the euro zone so the euro can better withstand global crises", the parties said.

The deal will lead to the formation of another "grand coalition" between Germany's two main political parties.

"From the kindergarten to the school, to the university and the workplace and then on into old age and care homes, we want to strengthen respect, opportunity and solidarity, and bring these systems up to date", he said.

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.

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The chancellor is under pressure to succeed after her attempt to patch together a coalition with the Green party and the pro-market Free Democrats failed in November.

The progress in stabilizing Germany's government propelled the euro to a three-year high versus the dollar to trade at $1.2122 as of 11:09 a.m.in Frankfurt.

The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election.

Friday's agreement states that the number of new asylum-seekers shouldn't exceed a range of 180,000-220,000 annually.

Christian Democrat and Social Democrat leaders also agreed to lower the tax surcharge introduced to fund the reunification of east and west Germany by €10bn (£9bn) by 2021.

They pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including the internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax. The SPD leader plans to tour local party chapters next week to sell the deal, while the SPD's youth organization plans protest rallies to lobby against it.

"We have, in what feels like a long time since the election, seen that the world will not wait for us", Merkel said. He also supports the creation of a finance minister and stand-alone parliament for the eurozone - ideas that are viewed with scepticism in Germany and did not appear in the coalition document.

Other reports by GizPress

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