Published: Sat, January 13, 2018
Global News | By Stacy Ballard

What's next for Germany after Angela Merkel's coalition government breakthrough?

What's next for Germany after Angela Merkel's coalition government breakthrough?

Germany now has a caretaker government, limiting Merkel's ability to launch major initiatives at a time when French President Emmanuel Macron has pressed for ambitious reforms in the European Union.

However, Schulz changed course after Merkel failed late previous year to form an alternative coalition government with the Liberals and the Greens.

Germany will limit the number of asylum seeker arrivals to around 200,000 annually under a draft coalition agreement sealed Friday (Jan 12) in marathon talks between the country's two biggest parties.

"We had intensive, serious, very deep exploratory talks", said Merkel, looking ebullient and a little relieved alongside the other two party leaders in the SPD's headquarters in Berlin.

Merkel's first attempt to form what Germans refer to as a "Jamaica" coalition with the Greens and Free Democrats (FDP) collapsed in November. Therefore, Europe needs a new departure, and she was optimistic that things were moving ahead.

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The SPD's youth wing chief Kevin Kuehnert told Zeit Online that he would embark on a national tour to press his case to opposing a new grand coalition before a September 21 party congress.

But her party failed to gain an overall majority and it has so far failed to negotiate a coalition. "If we think back to the election night, when Martin Schulz announced he would never enter into a government with Angela Merkel - and now he tries to convince his party base of just that - it shows the political challenges".

"It's a good news for European integration, as France and other EU major countries are waiting for Germany to have opinions on it, and on some points like stronger European common budget, is really a big astonishment for me", Prof.

The talks are not only crucial for Merkel, but also for Schulz and the leader of Merkel s Bavarian allies, Horst Seehofer, said political analyst Karl-Rudolf Korte of Duisburg-Essen University.

And the agreement between Germany's two largest parties sees them commit to developing "common positions with France on all important questions of European and global politics".

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European Commission President Jean-Claude Juncker called it a "significant, positive, forward-looking contribution" to the European policy debate.

A commitment to "sustainably strengthen and reform the euro zone" in close partnership with France does give Merkel scope to secure her legacy as a guardian of the European project.

Business leaders said that with the compromise paper, the probability of Germany finally getting a new government has risen, which was important for business as it would put an end to the ongoing uncertainty in Berlin.

They promised to devote "specific budget funds" to the economic stabilisation of the single currency bloc and to support "social convergence" and structural reforms, saying this could form the basis of a future "investment budget".

Though a challenger has yet to come forward, impatience is growing in Christian Democrat ranks about Merkel's tendency to manage crises as they arise rather than presenting a vision the party can rally behind and sell to voters. At best, a government will still not be sworn in by late March or early April, according to some experts.

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