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Germany moves toward a new coalition government after major concessions by Angela Merkel

Germany moves toward a new coalition government after major concessions by Angela Merkel
German Chancellor Angela Merkel with Martin Schulz, left, of the Social Democrats and Horst Seehofer, chairman of the Bavarian Christian Social Union. (John MacDougall / AFP/Getty Images)

German Chancellor Angela Merkel on Wednesday made major concessions to a junior political party, including giving up control of key ministries, to reach an agreement for a proposed new coalition government that would end months of uncertainty.

The agreement, coming nearly five months after the Sept. 24 election put Merkel on track for a fourth term as chancellor, calls for the center-left Social Democratic Party to hold the vice chancellorship and several Cabinet posts, including the coveted finance and foreign berths.

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The deal is subject to a postal vote by 460,000 registered members of the Social Democratic Party — many of them with a deep aversion to Merkel and her conservative Christian Democratic Union party. The results are expected by March 4.

Merkel, whose party won the largest share of votes in September but fell far short of a majority in Parliament, appeared willing to give the Social Democrats almost everything the party demanded to end the longest period of political limbo in the country's postwar history. Germany boasts Europe's biggest economy.

Merkel said at a news conference that negotiating the conditions for the coalition government was a long but worthwhile journey.

"We've got a basis for a good and stable government, which our country needs and that many around the world expect from us," said Merkel, who has been chancellor for 12 years.

The Christian Democrats and the Social Democrats have been the nation's dominant parties since the late 1940s.

The left wing of the Social Democrats and its powerful youth organization, the Jusos, however, have been campaigning hard against another "grand coalition" as junior partners to Merkel after the party posted its worst postwar result: 20% of the vote in the September election.

Merkel's conservatives were also battered in the election, falling to 33% of the vote in part because of voter frustration over her 2015 decision to open the country's borders for more than a million refugees from Syria, Afghanistan, Iraq and other troubled spots.

Merkel gave the Social Democratic Party, or SPD, much of what it wanted probably because she feared grass-roots members would vote against a deal and and plunge Germany into a prolonged period of uncertainty with new elections, political leaders and analysts said.

"You can see the SPD's signature quite clearly in this agreement," said party Chairman Martin Schulz, who will become the country's next foreign minister if the deal is approved.

Schulz said the 177-page agreement includes plans to increase spending on schools, housing, pensioners and job market reforms that party members like to see.

Germany has been running budget surpluses since 2012 and is expected to post a $35-billion surplus in 2018. But rather than cut taxes, the agreement indicates the government would increase spending by about $60 billion over the next four years — much of that on projects the Social Democrats favor.

The unusual turmoil in Germany after decades of political stability in a three- or four-party Parliament was caused at least in part by the rise of the upstart far-right Alternative for Germany party, which won 92 seats in the 709-seat Parliament in September's election.

Alternative for Germany showed surprising strength, and its campaign aimed against foreigners and refugees made it difficult for the other parties to form a majority. Merkel ruled out a minority government, in part because of lingering fears over political instability in the 1930s that led to the rise of Adolf Hitler and the Third Reich.

The Social Democrats initially wanted to spend the next four years in opposition after spending the last four years as Merkel's junior partner. but the party agreed to explore another four-year coalition after she unexpectedly failed in November to persuade the Greens and Free Democrats to join forces with her.

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The deal would give Social Democrats control of seven Cabinet posts. The new finance minister would be expected to push the government into taking more pro-European Union positions that France, Italy, Spain and Greece have long been demanding, and could get Germany to relax some of its hard-line positions against struggling EU countries such as Greece, Italy, Spain, Portugal and France, analysts said.

"Merkel's main goal, clearly, was holding on to power and the chancellery," said Thomas Jaeger, a political scientist at Cologne University, who expects Germany to be more open to giving greater financial support for Eurozone countries struggling with high deficits.

"She was willing to pay any price to put this government together," Jaeger said. "She had to make it happen now because if it came to new elections, it would have become quite difficult for her to continue as party leader."

Kirschbaum is a special correspondent.

UPDATES:

2:20 p.m.: This article was updated throughout with Times reporting.

This article was originally published at 2:45 a.m.

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