Merkel Bloc, SPD Still Face Heavy Lifting in Coalition Talks

(Bloomberg) -- Chancellor Angela Merkel’s bloc and Germany’s Social Democrats secured an agreement on education even as “large” policy differences remain, a top party official said as parties near a self-imposed weekend deadline.

Merkel Bloc, SPD Still Face Heavy Lifting in Coalition Talks

Negotiators in Berlin remain willing to compromise, Andreas Scheuer, the general secretary of the Christian Social Union, the sister party of Merkel’s Christian Democrats, said after four hours of top-level talks. The parties are closing in on a deadline for a deal by Sunday, though they’ve given themselves two more days if outstanding issues arise.

“We’re going to have a number of controversial issues until the very end,’’ Scheuer told reporters in Berlin shortly after midnight on Friday.

After more than four months without a government, Germans have been waiting as the divided Social Democrats struggle to manage a return to government with Merkel. The SPD under Martin Schulz was forced to back off a vow not to join a Merkel-led cabinet after a first effort to forge a multi-party coalition failed.

Merkel Bloc, SPD Still Face Heavy Lifting in Coalition Talks

‘Great Urgency’

Once an agreement is reached, it will be put to a vote by the SPD’s 440,000-strong membership across the country, a process that could take three weeks. Many within the party have bridled at the prospect of governing again with Merkel, with a thin majority approving coalition talks at a special party conference last month.

A poll published late Thursday was the latest to show plunging support for the SPD, the main reason for its members’ anxiety. The party dropped 1 percentage point to 18 percent in a survey for broadcaster ARD, its lowest-ever level in that poll.

At the same time, support within the SPD for a coalition with Merkel is increasing, according to a ZDF poll published on Friday. Almost 60 percent of those surveyed back joining the chancellor in government again, up from 47 percent in January. Opposition fell to 39 percent from 51 percent.

Merkel Bloc, SPD Still Face Heavy Lifting in Coalition Talks

Manuela Schwesig, the SPD premier of the Baltic coast state of Mecklenburg Western-Pomerania, said negotiators would work through the rest of the week “with great urgency, from morning to night.”

Asked whether the Sunday deadline would hold, Schwesig said, “we need to take the time that we need so that we can do good things for the people.”

Days after the rival parties reached a compromise over family-reunion rights for asylum seekers -- one of the biggest stumbling blocks toward clinching a deal -- Merkel’s bloc and the SPD arrived at an agreement Thursday on federal financing for schools and expanding daycare.

Merkel also signaled that a growing German economy in the mid-term would generate a greater budget surplus. The rival parties will have “additional scope” beyond the 46 billion euros ($58 billion) in extra spending they’d agreed to in a preliminary accord last month.

The extra funds should be spent on digital-transformation projects, development aid and foreign and defense policy objectives, Merkel said Thursday.

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