Germany’s Merkel closes in on fourth term

Bloomberg

Chancellor Angela Merkel moved forward in her bid to form a fourth-term government after her prospective coalition partner agreed to shelve its misgivings and enter negotiations on a common policy platform for Germany.
Merkel, 63, welcomed the outcome of vote by Social Democratic Party delegates in Bonn following what she termed an “intensive and contentious” debate. The chancellor’s Christian Democrats and their Bavarian allies will coordinate on strategy, allowing talks aimed at a resumption of the so-called grand coalition to begin as soon as Tuesday.
The euro rose in early Asian trading on the prospect of an end to a near-four-month political stalemate that has gripped Europe’s biggest economy since last fall’s inconclusive election. CDU leaders are keen for talks to wrap up within two-to-three weeks, a timetable that would enable Merkel to move toward re-inauguration by Easter.
The decisive moment came at a special party convention called by the SPD to decide whether to move on to formal coalition talks on the basis of a joint policy outline reached between the two party blocs on Jan 12. But rather than achieving unity, five hours of impassioned debate led to a show of hands that appeared too close to call.
A subsequent formal count yielded the desired majority but underscored party divisions that could yet spell more political uncertainty ahead for Europe’s biggest economy.
“Many who voted in favor weren’t convinced with their heart — and that’s going to affect the negotiations,” said Josef Janning, head of the Berlin office of the European Council on Foreign Relations. The upshot is that the party’s decision to give its members the final say over any coalition pact is emerging as a bigger-than-expected hurdle. The euro rose 0.4 percent early on Monday in Sydney, but later gave up its gains to trade unchanged at $1.2226.
Opposition to another grand coalition was led by young and leftist grass-roots members, who favor a period of renewal outside of government. They argue that allying with Merkel’s bloc for eight of her 12 years in power has robbed the party of a clear identity, sapping voter support. Party Chairman Martin Schulz, who led the SPD to its worst result since World War II in the election, made the case for another tie-up as “the more courageous path.”
He pledged to press for expanded commitments on health care, hardship rules for refugees who want
to bring family members to Ger-many and curbing layoffs of
temporary workers.
A go-ahead from party members for the coalition is far from guaranteed, Matthias Miersch, head of the SPD’s left-wing caucus, said in an interview. Merkel’s bloc “now has to shift” on policy, he said. That idea received short shrift from leaders of Merkel’s party who met in Berlin. They welcomed the result in Bonn, but warned against any attempt to revisit the draft agreement reached in marathon talks earlier this month. “It’s not the CDU’s role to make SPD members feel good,” said board member Julia Kloeckner.
The result puts Merkel’s party critics on the backfoot for now, and renders less likely a repeat election or a minority government, both options filled with uncertainty.