emfizz.com January 20, 2018

'Breakthrough' agreement reached on German coalition talks

13 January 2018, 05:29 | Terri Saunders

Agreement reached on basis for German coalition talks

Merkel strikes preliminary deal to hold power in German coalition

"We determine that the number of new arrivals. should not exceed the range of 180,000 to 220,000 per year", according to a copy of the document agreed by Chancellor Angela Merkel's conservatives and the Social Democrats obtained by AFP.

NELSON: She said she wasn't sure until the very end that the deal would happen and lauded the negotiators for persevering.

However, an SPD party conference set down for January 21 still has to approve holding the talks for a rerun of the Merkel-led coalition that has ruled the nation for eight of the chancellor's 12 years in power.

The chancellor, who still commands wide respect overseas, needed the talks to succeed to avoid further erosion of her authority, after losing ground in September elections, and the weakening of German influence, not least in the European Union.

Still, continuity has a certain appeal in a country where the economy grew 2.2 percent a year ago and unemployment is low at 3.6 percent.

On Europe, the agreement aims to kickstart the Franco-German tandem driving European Union policies and integration by welcoming France's president Emmanuel Macron's reform ideas.

The deal also hints at the possibility of linking the European Union budget to political conditions, when it states that reciprocal solidarity must also count for the European Union budget.

"The mood is like the weather", Ralf Stegner, one of the SPD's deputy leaders, said as he gazed at the cloudy sky above Berlin ahead of yesterday's talks, as reported by Reuters.

"Living can not be allowed to be a luxury", he said.

For the first time, said Carsten Brzeski at ING, the members had used the term "upside risk" in connection with the growth outlook, while the dissenting views appeared to be getting more vocal.

However, the SPD is still facing strong opposition of a renewed grand coalition, especially from its grassroots and youth members, who are anxious about the further marginalization of the party in its cooperation with the Union.

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In the same speech, he vowed the SPD would take an active role in shaping European policy, refusing to give a say to more conservative figures such as former finance minister Wolfgang Schäuble.

"The negotiations are not just about a coalition, but also their careers".

The hope was to form a new government "before Easter", which falls on April 1, said the CSU's Seehofer.

If the two sides fail to form a coalition, a new general election is likely.

Merkel vowed at a summit of European Union leaders last month to finalise joint positions on Europe with Macron by March.

French government spokesman Benjamin Griveaux called the agreement "good for Germany, good for France and good for Europe".

The DAX index continues to rocket higher as the incoming data from Germany gets better and the political situation in Germany also seems to be heading to a conclusion, this way or that.

Carsten Nickel, deputy research director at advisory firm Teneo Intelligence, said of Merkel's centrist strategy: "The real challenge has always been to sell this logic internally".

Merkel's bloc does not support the SPD's ideas and, in turn, proposes an increase of military spending in the framework of North Atlantic Treaty Organisation member states' agreement to spend 2 percent of the GDP on the military, which the SPD opposes.

Though a challenger has yet to come forward, impatience is growing in Christian Democrat ranks about Merkel's tendency to manage crises as they arise rather than presenting a vision the party can rally behind and sell to voters.

"The conversation has now moved on", said Eurasia's Rahman.

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