Merkel Leads Marathon Coalition Negotiations as Obstacles Abound

(Bloomberg) -- German Chancellor Angela Merkel led marathon talks that stretched into early Friday on forming an unprecedented four-party government for Europe’s biggest economy as major differences remained between the potential partners.

After a month of exploratory talks, Merkel had set an informal Thursday deadline to unlock actual coalition negotiations. She and others in her Christian Democratic-led bloc met for hours with the Free Democrats and the Green party to reach a verdict on whether to move forward to the next phase. As the talks dragged on with no end in sight, some participants raised the specter of the discussions in Berlin falling apart.

Discord over sharing risks in the euro area, cutting carbon emissions and limiting immigration have hamstrung Merkel, Europe’s longest-serving leader, who won a fourth term in September but is stuck with a caretaker government for now. Even a deal to move ahead now would be only an intermediate step, followed by detailed talks on a policy blueprint for the next four years.

While negotiators narrowed differences on cutting carbon emissions, migration remained a major sticking point, according to two party officials who asked not to be identified. The key dispute is over a moratorium on family members joining asylum seekers in Germany, which the Greens want to lift and Merkel’s Bavarian ally, the Christian Social Union, supports.

If the CSU refuses to move at all on migration, “this is practically the end of negotiations,” Claudia Roth, a negotiator for the Greens, told reporters in Berlin earlier Thursday. “It was a good idea to bring my toothbrush,” she quipped.

Germany’s domestic conflicts, which reflect an increasingly splintered political landscape, are playing out on the global stage. Merkel has put euro-area policy on hold until there’s a new government. At a United Nations climate conference in Bonn on Wednesday, she flagged Green-led demands for curbing coal as a point of dispute in coalition talks.

“This is a difficult task, a very complicated task,” Merkel told reporters Thursday. “I hope that there’s a will to make it work. I’m firmly convinced that we have the responsibility to do that.”

Hemming in the appetite for conflict on all sides is the risk of a repeat election if the talks collapse. Merkel’s bloc won in September with its lowest share of the vote since 1949, while the anti-immigration Alternative for Germany party, which campaigned against Merkel and the rest of the political establishment, entered parliament with 12.6 percent.

Party leaders want to wrap up exploratory talks before determining whether they have enough in common to form a government. “I think success is possible,” Merkel said.

Merkel Leads Marathon Coalition Negotiations as Obstacles Abound

This week’s goal is to list agreements and disputes in a way that allows all parties to sign off on starting formal coalition talks, which are expected to take weeks. If that hurdle is cleared, the next obstacle may be a convention by the Greens on Nov. 25 that will vote on whether to proceed.

“We know we have a responsibility to the country,” Katrin Goering-Eckhardt, a senior Green negotiator, told reporters earlier in the day. “Of course we know that some people have placed their trust in the other negotiating partners. We want everyone to come together and think about what’s best for our country.”

Should the talks fail, Merkel’s options will narrow. The Social Democrats, with whom she governed since 2013, say they aren’t interested in another alliance with her after the party fell to its worst electoral defeat since World War II. That would leave Merkel with two scenarios that postwar Germany hasn’t yet seen: a minority government or an election repeat.

The parties are “1.5 light years away from a solution,” Juergen Fischer, a spokesman for Bavarian Prime Minister Horst Seehofer, said Thursday evening.

©2017 Bloomberg L.P.