German parties strike deal on coalition govt
German Chancellor Angela Merkel's conservatives made major concessions to the centre-left Social Democrats (SPD) to agree a coalition deal yesterday that should give Europe's powerhouse a new government after four months of uncertainty.
In a move likely to herald a shift in Germany's euro zone policy, a source involved in the negotiations said the SPD would take the finance ministry, a post held until recently by conservative Wolfgang Schaeuble, widely despised in struggling euro zone states during his eight-year tenure for his rigid focus on fiscal discipline.
SPD leader Martin Schulz said earlier this week that his party had ensured 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 and secure Merkel's fourth term in office.
Merkel said the difficult coalition talks had been worth it and the government would be a stable one. Schulz said the agreement reached with the conservatives would mean a change in direction for the European Union.
SPD's 464,000 members still have the chance to veto the deal in a postal ballot.
Julian Reichelt, editor of Germany's biggest selling paper, Bild, suggested they had got the better end of the deal, tweeting: "This is the first SPD government led by a CDU chancellor."
The deal should allow Germany to resume its leading role in international affairs and, at least for now, put an end to questions about how long Merkel will stay in her job.
A negotiating source said the SPD would have the finance and labour ministries while media reported it would also secure the justice, family and environment ministries.
Merkel's Christian Democrats (CDU) will get the economy, defence, education and agriculture ministries while their Bavarian allies, the Christian Social Union (CSU), will provide the interior minister in the form of Horst Seehofer, who talks tough on migration, media reported.
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