Home > News > World
Saturday October 5, 2013 MYT 12:55:01 AM
Saturday October 5, 2013 MYT 12:55:52 AM
Chancellor Angela Merkel led her conservatives to their best result in over two decades in a German election on September 22 but needs to find a coalition partner to secure a third term.
She held first preliminary talks with the Social Democrats (SPD) on Friday and the two sides agreed to a second round of talks on October 14. First she and conservative leaders will meet the Greens on Thursday to assess whether there is enough common ground to enter formal coalition negotiations with either party.
Below are key coalition-related quotes from senior officials, as well as areas of potential compromise on policy and personnel.
HERMANN GROEHE (CDU)
"The atmosphere was good, business-like and constructive. Both sides have in mind the major challenges lying ahead for our country and Europe. There is a lot of common ground there....today we saw that it makes sense to meet again."
ANDREA NAHLES (SPD)
"We identified some consensus points but we also talked about controversial points and identified differences, and further talks are thus needed...We identified the major groups of issues and didn't go into details. But Herr Seehofer (CSU leader and opponent of tax increases) was in good spirits."
PEER STEINBRUECK (SPD)
"The financial issue is one of the completely open issues. If one agrees that more financing is needed for education, infrastructure and local communities, the question arises: how will that be paid? The question will definitely continue to occupy everyone's attention."
ALEXANDER DOBRINDT (CSU)
"We had a very orderly and reasonable round of talks today...The goal of a second round of exploratory talks is naturally that one can then decide whether to enter into full-scale coalition negotiations or not."
POTENTIAL POLICY COMPROMISES
TAXES - The SPD wants to raise tax rates on incomes above 100,000 euros to 49 from 42 percent, but Merkel and her conservatives have ruled out tax hikes. One compromise solution would be to target more revenues by stepping up a crackdown on tax evasion, and closing tax loopholes for big corporations. There is also a chance the CDU/CSU would agree to a symbolic increase on top earners in exchange for off-setting tax relief at the lower end.
WAGES - The SPD is expected to make a nationwide minimum wage, a key plank of their campaign platform, a condition for a coalition. The CDU/CSU, which only supports "wage floors" on a regional or sectoral basis, may have to accept some form of blanket minimum wage, but it could end up being lower than the 8.50 euros the SPD wants.
EUROPE - No insurmountable differences. The SPD would seek symbolic steps to promote growth in struggling euro zone states, but is unlikely to press for more German taxpayer money to be used for this purpose. It will push for a financial transactions tax and faster movement towards a banking union, where banks themselves shoulder the costs of restructuring. The SPD is not expected to push hard for debt mutualisation, despite having backed the idea of a debt redemption fund during its campaign.
ENERGY - The SPD and CDU/CSU could reach a compromise on scaling back subsidies for renewable energy. The Greens, however, would be a more difficult partner for the conservatives as they oppose lower renewables incentives.
PUBLIC INVESTMENT - The SPD wants to use the tax revenues generated by its planned hikes for top earners to ramp up spending on education, infrastructure and R&D. The CDU/CSU can probably live with public spending increases in these areas, but will resist financing them with tax hikes or higher debt.
BARGAINING FOR CABINET POSTS
* Finance minister Wolfgang Schaeuble has signalled a desire to stay in his post, and is said to have the support of Merkel. Unless the SPD or Greens insist on the finance ministry as a condition for entering a coalition with Merkel, Schaeuble is given a good chance of continuing in his current position.
* For the SPD, much will depend on party chairman Sigmar Gabriel, whose name has been linked to various ministries -- including foreign, finance and labour. He could also decide to opt out of government and take over the SPD leadership in parliament, though this could meet resistance from the party and incumbent Frank-Walter Steinmeier who is keen to stay put.
* If Gabriel is not in the cabinet, Steinmeier is seen as a candidate for the top SPD ministry, which could end up being foreign, finance or a new ministry grouping energy and infrastructure. SPD parliamentary whip Thomas Oppermann has also been mentioned as a possible finance minister, though he is more likely to end up with interior or defence. Chancellor candidate Peer Steinbrueck has made clear he will not have a role in a Merkel cabinet.
* Were the SPD to claim the finance ministry, one source said Merkel might want to shift Schaeuble to the foreign ministry. But the extensive travel involved in this post may be too much of a burden for the wheelchair-bound Schaeuble.
* Apart from Schaeuble, the other member of Merkel's CDU who is seen as a lock for the cabinet is Ursula von der Leyen, who may be keen on the foreign ministry. If she were to get this post, or move into the parliamentary leadership role held by Volker Kauder, many would see it as a sign she was being groomed to succeed Merkel.
* It remains unclear whether the SPD's pre-election proposal to group together responsibility for all energy-related issues in one ministry -- they are currently shared between the economy and environment ministries -- will see the light of day. Merkel is likely to want someone she trusts to oversee her "Energiewende" shift from nuclear to renewable power.
(Reporting by Stephen Brown, Erik Kirschbaum and Noah Barkin)
Copyright © 1995-2013 Star Publications (M) Bhd (Co No 10894-D)