Merkel urges Social Democrats not to drag out coalition talks

Chancellor Angela Merkel has called on Germany's Social Democrats (SPD) not to drag out talks for a fresh grand coalition, a week after the failure of her only other coalition option.

At a regional conference of her Christian Democratic Union (CDU), the acting chancellor made clear that challenges at home, in Europe and beyond left it "desirable to form a government very quickly".

“Naturally compromise is part of that,” she said. “One has to approach one another in respect and find sensible solutions for the people and for Germany’s future.”

Ahead of talks this week with SPD leader Martin Schulz, Dr Merkel's remarks were an echo of those she made after polls closed on September 24th.

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Then, Mr Schulz described the worst results in almost 70 years for both CDU and SPD as a vote of no confidence in the grand coalition.

But in the same post-election television discussion Dr Merkel had a different perspective, appearing to have an inkling that the last word had not been spoken on the grand coalition.

“We are living in stormy times,” she said, adding with a nod to the SPD leader that “everyone” had to live up to their political responsibilities.

Embarrassing U-turn

Mr Schulz renewed his refusal to consider a grand coalition a week ago, after talks collapsed between the CDU, the liberal Free Democratic Party (FDP) and the Greens.

That annoyed other leading party colleagues, who promptly forced him into an embarrassing U-turn.

And so now, two months after the election, things have come full circle, with Germany apparently on its way to a third CDU-SPD grand coalition and fourth Merkel term.

The only difference: the SPD, as Dr Merkel’s only realistic alternative to a snap election, now feels in a stronger negotiating position than ever before.

That’s why the acting chancellor’s call for a swift coalition agreement didn’t go down well with the centre-left party on Sunday.

"Given the way things lie, Mrs Merkel is not in a position to dictate terms," said Malu Dreyer, SPD governor of the southwestern state of Rhineland-Palatinate.

Matthias Miersch, spokesman for the SPD left-wing, recommended Dr Merkel take a few days out for “self-examination and self-criticism”.

SPD Bundestag leader Andrea Nahles, a key figure in the Schulz U-turn and in looming talks, said it was "not true" to say that the grand coalition was a done deal.

“I don’t know what will emerge from these talks we are having,” she said. The priority for her party: “To achieve the maximum of what we want.”

Balancing the books

Ahead of formal talks, CDU and SPD staked out their first policy flags. Dr Merkel insisted that she wanted to continue Germany’s recent run of balanced budgets, tax cuts for lower and middle incomes and changes to the income levy introduced to finance German unity.

She also insisted that there would have to be limits on refugee arrivals in the interests of “social cohesion”, a sticking point in talks with the Greens.

Horst Seehofer, Bavaria's CSU leader and state governor, threw his weight behind a renewed grand coalition, describing it as "better in any case" than a minority government or the four-way "Jamaica" option that collapsed a week ago.

The SPD is demanding higher social spending, greater investment and a readiness to look with an open mind at French euro-zone reform proposals.

A poll for Germany’s Bild am Sonntag newspaper suggests voters are resigned to a third grand coalition, with 52 per cent in favour and support up two points respectively for Dr Merkel’s CDU/CSU alliance and the SPD.