German parties race to conclude 'grand coalition' negotiations

Germany has been in political limbo since a September 24 election in which Merkel failed to win a clear majority, in part due to the rise of the anti-immigration Alternative for Germany (AfD) which took millions of votes from all major parties.

Talks resumed in Berlin yesterday and the German chancellor expressed her "goodwill" and said: "There are still important issues that need to be resolved".

The alliance of Germany's Christian Democratic Union and Christian Social Union (CDU/CSU), and the Social Democratic Party (SPD) are planning to present Tuesday a coalition agreement concerning the formation of a new government, the Rheinische Post newspaper reported Monday.

"So we've decided together that we won't have a night session tonight but rather that we will continue our negotiations and discussions in a detailed and focused way here in Willy Brandt House from 10 o'clock tomorrow", he said, referring to the SPD headquarters.

The two sides are also at odds over the SPD's call to replace Germany's dual public-private healthcare system with a universal insurance system for all.

Both main parties reached a breakthrough deal in January when they presented an in-principle agreement to start formal coalition talks that could lead to a new government for the biggest European Union economy by the end of March.

In a full day of negotiations, the parties were also hoping to tick off issues including finances, rents and real estate prices and municipalities.

Mrs Merkel's attempt to put together a government with two smaller parties collapsed in November.

The agreement would commit the next German government to "more investments, an investment budget for the eurozone, and an end to the austerity mantra", as well as "fair taxation" of internet giants such as Google, Apple, Facebook and Amazon, Schulz said via an information service for SPD party members. In return for its backing this time, the party has said it will extract deep concessions from the CDU-CSU, making talks more contentious.

Failure to reach an agreement, or a deal's rejection by Social Democrat members, would leave a minority government under Merkel or a new election as the only viable governing options.

  • Eleanor Harrison