Key points agreed in German exploratory coalition talks

Frederick Owens
January 13, 2018

German Chancellor Angela Merkel's conservatives and the Social Democrats (SPD) agreed after all-night talks on Friday to a blueprint for formal coalition negotiations.

After the parties cleared obstacles on immigration and taxes, Merkel said she was "optimistic" they could seal a deal on a "stable" right-left "grand coalition" government.

The progress of talks between Germany's Christian Democrats and Social Democrats will probably put an end to months of political uncertainty in Berlin after the 24 September 2017 elections, when no new government was formed and the first round of "Jamaica" coalition talks collapsed.

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. "But I don't think we need a new instrument to do so", he said.

After the week of negotiations and the overnight session, a visibly exhausted Merkel told reporters that she, too, was now "optimistic that things will move forward" to forming a new coalition of the same parties that have run Germany for the past four years.

Germany's acceptance of refugees has been a key part of the deal.

The common European foreign and security policy must be strengthened in the sense of a peace power Europe, says the document, calling for strengthened cooperation in security and defense policy (PESCO) and bringing it to life. The first, involving the business-friendly Free Democrats and the Greens party alongside the Christian Democrats and Christian Social Union, failed after more than four weeks of negotiations that were marred by infighting and leaks to the media.

If the new coalition doesn't come together, the only remaining options would be an unprecedented minority government led by Merkel's conservatives or a new election. Despite the challenges ahead, the news buoyed markets and sent the euro to a three-year high of $1.2138.

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

The parties agreed to limit numbers of refugees and migrants coming to Germany to around 200,000 following arrival of more than 1million asylum seekers since 2015.

Pledges to spend more in poorer regions and allow up to 1,000 family members each month to join refugees already living in Germany also seemed created to placate SPD members distrustful of governing with Merkel again.

The Social Democrats reportedly received commitments for hiring more care workers and increasing salaries in the sector, and for no cuts to the minimum pension level until at least 2025.

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.

Prime Minister Boyko Borissov of Bulgaria, which now holds the bloc's rotating presidency, said the European Union was waiting "impatiently" for Merkel to reemerge, heading a new coalition: "for the benefit of all".

But party leaders were in a buoyant mood on Friday morning.

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