Sunday

29th May 2016

Grand coalition is only option for Merkel

  • Merkel still has tough talks ahead (Photo: Felix O)

Chancellor Angela Merkel's Christian Democrats is set for a new round of exploratory talks with the Social Democrats on Thursday (17 October) with a formal request to form a coalition government expected soon afterwards

A grand coalition is now the only option on the table after the Greens earlier this week announced they would stay in opposition saying the differences with Merkel's party are too great to form a government.

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The introduction of a minimum wage in all sectors of the economy is a key demand of the Social Democrats (SPD).

So far Merkel has opposed the idea, but on Wednesday the leader of her Bavarian sister party, Horst Seehofer, indicated that a compromise can be worked out.

In an interview with Sueddeutsche Zeitung, Seehofer said he is ready to accept a €8.5/hour minimum wage as long as the SPD drops its other demands for higher taxes and is "flexible" about the deadline for the introduction of the minimum wage.

"For me it's crucial: No tax increases and no new debt. This is very important for economic growth and for jobs," Seehofer said.

A compromise on the minimum wage may be enough of a precondition for the Social Democrats to agree at a party congress on Sunday to enter into real coalition talks with Merkel.

The new parliament will have its first session next week, with Merkel's outgoing cabinet entering into caretaker mode afterwards.

There is no legal deadline for a new government to be formed, with SPD deputy Andrea Nahles suggesting talks could drag on until January.

Finance minister Wolfgang Schaeuble, however, who is tipped to become foreign minister if the SPD gets the finance ministry, said he is confident a new government will be in place by next month.

"I think we will have a coalition by mid-November," he said last weekend while in Washington.

Analysis

How Portugal's leftist 'contraption' works

After six months in power, the improvised left-wing coalition between socialists, leftists and communists has managed to rule and even thrived, to many Portuguese's surprise.

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