Deal reached in German coalition talks after 24-hour session

Acting German chancellor Angela Merkel moved one, tortuous step closer to a fourth term on Friday morning after all-night talks ended in preliminary agreement for a new grand coalition in Berlin.

The breakthrough brings her closer to a final agreement and a fourth term but several hurdles remain: formal talks bookended by two votes of the centre-left Social Democratic Party (SPD).

On January 21st, SPD delegates vote on the preliminary agreement reached this morning, and whether formal talks should proceed. Later, all SPD members will be asked to vote on whether they are happy for their party to enter a grand coalition on the basis of outcome of negoations.

Last night’s exploratory talks dragged on almost 24 hours because of disagreements on refugee policy and reform of the tax, pension and health systems.

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At 9am on Friday (8am Irish time), 23.5 hours after talks began on Thursday, the horse-trading concluded between the centre-right Christian Democratic Union (CDU) of Dr Merkel, her Bavarian CSU allies and the SPD.

After a disastrous election in September, and one round of failed coalition talks behind her, Dr Merkel is hoping to woo the SPD back into power.

Aware the world was watching, she was unwilling to allow talks break up without agreement. But as leaders were served currywurst and gulash at midnight, they told their staff to be ready for an all-nighter.

Heading into their final day of talks on Thursday morning at SPD headquarters, Dr Merkel and her SPD opposite number, Martin Schulz, said they were anxious to secure a deal and end nearly four months of political limbo.

After working groups failed to bridge gaps on key policy points in talks this week, it fell to political leaders to conclude a high-stakes final round of horse trading.

“I expect it to be a tough day,” said Dr Merkel heading into talks on Thursday. “We’re keeping our eye on finding the right policies”.

Outside the SPD headquarters, hosting the talks for a second time, protesters braved the rain and chill to hold up posters reading “Make Europe Great Again”.

With the EU effectively at a standstill until Berlin gets its act together, Mr Schulz, the ex-European Parliament president, insisted Europe was uppermost in his mind.

“We will make clear in the last day of talks that a new government has to bring about a new departure for the EU,” he said. “What we need in Europe is the same as at national level … namely more solidarity.”

Even though leaders appear to have pulled off an agreement after their all-night session, the preliminary coalition agreement may yet fall apart.

SPD delegates will have their say on the preliminary coalition deal at an extraordinary party conference on January 21st.

And if they back full talks, entering government hinges on a second poll, of all SPD members, on any final coalition deal. All going well, a new government in Berlin is not likely before Easter. A collapse of talks, or negative SPD vote, would mean fresh elections and raise questions about Dr Merkel’s political future.

Until now the CDU/CSU has opposed key SPD proposals: to raise the top tax rate, merge private and public healthcare, and reinstate provisions for some refugees to bring over their families.

As dawn broke on Friday, SPD sources complained that that the Bavarian CSU was blocking agreement on immigration and tax. The Bavarian party is facing a September state election and knows anything less than a hard, conservative line on these points will hurt its weakening voter base.

The all-night session confirmed the doubts of leading SPD opponents to another grand coalition, who favour rebuilding their party in opposition.

“The longer talks take the more open things are,” said Mr Kevin Kühnert, head of the SPD youth wing, to Berlin’s Inforadio. “This country cannot afford another four years under this woman.”

Based on limited leaks, observers so far see no grand ambition for domestic or EU reform.

“Germans have been waiting more than 100 days for a government and they’ve had enough,” thundered the Bild tabloid, asking Dr Merkel: “Where is your plan?”

Political scientists agree that Germany’s third grand coalition in 12 years could be a lowest common denominator government.

“They will either only do cosmetic politics and lazy compromises,” predicted Prof Rudolf Hickel, of the University of Bremen, “or we will have a government where they’ll fight over details day and night.”