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Monday October 14, 2013 MYT 5:21:08 PM
Monday October 14, 2013 MYT 5:22:00 PM
Chancellor Angela Merkel led her conservatives to their best result in over two decades in a German election on September 22 but must still find a coalition partner to secure a third term.
After preliminary talks with the Social Democrats (SPD) last week and with the Greens on Thursday, to assess whether there is enough common ground to enter formal coalition negotiations, she will hold a second round of talks with both parties this week.
Below are key coalition-related quotes from senior officials, as well as areas of potential compromise on policy and personnel.
WOLFGANG SCHAEUBLE (CDU)
"Talks are proceeding much faster than people thought... I think we will have a government by the middle of November."
ANDREA NAHLES (SPD)
"Without an agreement for a nationwide minimum loan of 8.50 euros the SPD will not enter a government... SPD members would not accept anything else.
"I'm expecting more commitment (from the CDU/CSU) on Monday - first and foremost in terms of minimum wage, but not only there ... The talks on Monday will be decisive in determining whether there is a foundation for coalition negotiations... The CDU/CSU should not assume there will be a third round of exploratory talks."
HORST SEEHOFER (CSU)
"I'd prefer a grand coalition... But a programme might be possible with the Greens.. I don't see any point where I'd say that is completely out of the question."
KATRIN GOERING-ECKARDT (GREENS)
"You could feel during the first session of exploratory talks that this wasn't just for show. That is why we have agreed not to have a time limit when we talk to the CDU/CSU again.
"If SPD Chairman Sigmar Gabriel invited us and the Left party to exploratory talks then we would go... but I'd don't believe they (the Left) are capable of governing given their Eurozone policies and foreign policy."
POTENTIAL POLICY COMPROMISES
TAXES - The SPD wants to raise tax rates on incomes above 100,000 euros to 49 from 42 percent to pay for higher investments in infrastructure, education and research. Merkel and her conservatives are open to higher public investment but have ruled out financing this through tax hikes or higher debt. Both sides have signalled a readiness to compromise, but finding the required revenues will be difficult. One solution for bringing more cash in would be to close tax loopholes for multinational corporations.
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.
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.
(Compiled by Berlin bureau)
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