Christian Union and Social Democrats reach breakthrough in coalition talks: report

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Christian Union and Social Democrats reach breakthrough in coalition talks: report

Angela Merkel and Martin Schulz. Photo: DPA

German Chancellor Angela Merkel's conservatives reached a "breakthrough" deal Friday with the second biggest party, the Social Democrats, toward building a new "grand coalition" government, sources close to the negotiations said.

After more than 24 hours of talks, the party chiefs reached an in-principle agreement to start formal coalition negotiations that could lead to a new government in coming months, the sources told AFP.

But the game is not over yet. Although the party leaders have reached a breakthrough, negotiation groups still have agree with the results. On Friday morning the negotiating teams were still pouring over a 28-page document, which contained the compromises the parties had hammered out over the preceding days.

If they do, the SPD party congress in Bonn would still also need to approve the opening of talks next week.

SPD leader Martin Schulz aims to promote a new edition of the grand coalition within the next few days. He is likely to face hefty resistance from Jusos, the youth wing of the party.

The Jusos has repeatedly voiced its fierce opposition to a renewal of the "grand coalition" and its leader Kevin Kühnert has spent the past few days touring Germany in an attempt to convince SPD factions across the country to vote down a potential deal.

Until the end of talks on Friday morning, the leaders were reportedly most concerned about future fiscal policy, migration and refugees.

Chancellor Angela Merkel and Martin Schulz had confirmed their willingness to reach an agreement on Thursday morning before the last round of exploratory talks began. But it was clear then that "big obstacles" still had to be cleared out of the way.

The negotiators reportedly spent many hours discussing the financing of Germany's various costly projects in social and health policy. Although a financial margin of €45 billion was repeatedly brought up for a future government, the costs of desired individual projects in some cases doubled.

The political talks were tripped up by the country's strong finances, as parties had opposing views on how to spend the cash.

The SPD, seeking to push its social welfare agenda, is demanding greater relief for the lower and middle income brackets and tax hikes for top earners, while the conservatives had campaigned with a promise of "tax cuts for all".

The embattled mainstream parties are also struggling to fend off the encroaching far right, which has seized on anger and fears over a mass influx of refugees and netted a record showing at the September poll.

To halt a haemorrhage to the AfD, Merkel's alliance wants a tougher stance on immigration, something that is hard to sell to the SPD.

'SPD mood grim'

A new coalition deal can still be torpedoed when SPD delegates, and later rank-and-file members, get to vote on whether the party should once again govern in Merkel's shadow.

Scepticism is high after the SPD scored a humiliating result in September.

The SPD's youth wing chief Kevin Kühnert has vowed to embark on a national tour to press his case to opposing a new grand coalition before a September 21st party congress.

"The mood of the party rank and file with regards to a grand coalition is still grim. That's why I think we have a good chance," said Kühnert.

Opinion polls suggest most Germans are less than enthusiastic about a new conservative-SPD alliance.

A survey published by Focus magazine found that only 30 percent of Germans favour a return of the grand coalition, while 34 percent prefer new elections.

Another poll published by public broadcaster ARD found that only 45 percent viewed a new grand coalition positively, while 52 percent did not.