Advertisement

German parties reach coalition deal in principle: sources

From Reuters - February 7, 2018

BERLIN (Reuters) - German Chancellor Angela Merkels conservatives and the Social Democrats (SPD) on Wednesday agreed to a coalition deal, taking Europes economic powerhouse closer to a new government after months of uncertainty that unnerved partner countries and investors.

In a move likely to mean a shift in Germanys euro zone policy, media reported the SPD would take the finance ministry that was until recently presided over by conservative Wolfgang Schaeuble, widely despised in struggling euro zone states during his eight-year tenure for his focus on austerity.

SPD leader Martin Schulz said earlier this week that his party had ensured that an agreement with the conservatives would put an end to forced austerity and set up an investment budget for the euro zone.

Handing over the crucial finance ministry suggests the conservatives had to make big concessions to get the SPD to agree to renew the grand coalition that has governed Germany since 2013.

Bruised by its worst election result in the post-war era, the SPD had planned to revamp itself in opposition and only agreed to the coalition talks reluctantly. Its 464,000 members still have the chance to veto the deal in a postal ballot.

In a message posted alongside a photo of Schulz and other SPD negotiators smiling, the SPD negotiators wrote: Tired but happy. There is a treaty! Finally. Now the final details are being worked into the text.

The agreement will lift much of the uncertainty that has weakened Germanys role in international affairs and raised questions about how long Merkel will stay in her job.

MULTIPLE CHALLENGES

News of a deal will bring some relief to investors and partner countries, who had been concerned by Merkels failure to cobble together a government in more than four months at a time when Europe is facing multiple challenges - including the need for euro zone reform and Britains looming departure from the EU.

Advertisement

Continue reading at Reuters »