‘Grand coalition’ deal struck in German negotiations

Martin Schulz agreed 'grand coalition' deal with Angela Merkel © SPD Schleswig-Holstein
Martin Schulz © SPD Schleswig-Holstein

Angela Merkel’s Christian Democratic Union (CDU) party has agreed a new ‘grand coalition’ deal with the centre left Social Democrats (SPD) more than four months after Germany’s general election.

The CDU has held meetings with a number of minority parties, but it was always thought that an arrangement with the SPD – the so-called ‘grand coalition’ deal – was seen as the most likely outcome.

However, Merkel’s party has been forced to cede some key departments – which, in the draft coalition deal, are expected to include the finance, foreign and labour ministries – to the SPD to secure the deal.

The two parties reached an agreement after an overnight session of deal-making, which in turn followed four months of meetings during which they discussed possible compromises in the interest of reaching a coalition deal. The alternatives – an unstable minority government, or a second election – were seen as the worst possible options.

What was Merkel’s response?

Chancellor Merkel said that the deal-making process had not been easy, and recognised that many in her party were disappointed with the compromises CDU had made in order to secure the deal. Indeed, the chancellor has faced criticism from some veteran members of her party, who have accused her of ceding too much power.

The Guardian reports that CDU veteran Wolfgang Bosbach said: “I’d wager that the SPD didn’t even believe it could get the finance ministry when the negotiations started. The CDU should have insisted on keeping the positions it already had.”

Who are the key players in the deal?

SPD leader Martin Schulz is expected to step aside from his leadership role to take charge of the country’s foreign ministry. In this case, former labour minister Andrea Nahles is expected to become party leader.

Meanwhile, Olaf Scholz, currently mayor of Hamburg, is expected to take over from Wolfgang Schäuble in the finance ministry. The deal promises an increase in spending on infrastructure and services, and tax cuts, all of which may boost the German economy. Further, Scholz has suggested that Germany may be open to increasing its contributions to the EU budget.

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