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Merkel Looks to Rivals' Convention to Unlock Path to Fourth Term

Bloomberg 2017-12-07 10:30:00

Germany’s Social Democrats are testing support for a renewed alliance with Chancellor Angela Merkel with a party convention vote that’s a crucial hurdle in her quest for a fourth term.

Polls suggest most SPD members still need to be persuaded to have the party serve as junior partner to Merkel’s Christian Democrat-led bloc for another four years. Party leaders are asking delegates to back a motion on Thursday that only approves preliminary talks with Merkel without immediately setting a rerun of the “grand coalition” as a goal.

Ahead of the three-day convention in Berlin, only 28 percent of SPD supporters favored reviving the alliance of Germany’s two biggest parties, though even fewer wanted a new election, according to a Spiegel Online poll. A majority backed a third option: a Merkel-led minority government backed by the SPD.

“There has to be a significant majority for the vote on entering talks with the Christian Democratic bloc, otherwise there is a big danger that the SPD fumbles in the course of negotiations,” Carsten Brzeski, chief economist for Germany and Austria at ING Diba in Frankfurt, said in an interview. “Even with a good result, there’s still a risk the talks could collapse.”

The Social Democrats have engaged in a round of soul-searching after chairman Martin Schulz initially vowed not to return the party to government with Merkel, a reaction to the party’s worst result since World War II in the German election on Sept. 24.

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Schulz told reporters on Wednesday he expects a stormy debate at the convention, which begins at 11 a.m. in Berlin, and will be a tough negotiator if talks go ahead, the Deutsche Presse-Agentur newswire reported.

The SPD head is leaving open the option of supporting a Merkel-led minority government, an arrangement that Germany has shunned since World War II and which the chancellor rejects as unstable.

Schulz, 61, also is running for re-election as party chairman on Thursday, a ballot that’s another measure of his support among the party base.

Merkel’s coalition talks with the Free Democrats and the Green party collapsed on Nov. 19, shifting the burden to the Social Democrats to reconsider and avoid a repeat election in Europe’s biggest economy.

Nothing Automatic

Schulz eased off his rejection of Merkel, prodded by many in the party base as well as President Frank-Walter Steinmeier, a Social Democrat now pledged to a nonpartisan role, who called on all parties face up to their obligation to voters. Schulz and other SPD leaders insist there will be no “automatic” new coalition and have laid out demands including a strengthening of the euro area.

Ending the political deadlock could take months. If Thursday’s motion passes, Merkel and Schulz would be expected to meet as early as next week, with exploratory talks possibly starting in December.

A select group of national SPD delegates would have clear the way for formal coalition talks, possibly in January, which would take several weeks. Any coalition pact would be put to a nationwide vote by party members, a scenario that means Merkel’s new term might only begin in March.

If the SPD takes the plunge, a difficult task of aligning policies lies ahead. Schulz campaigned on greater European integration along the lines proposed by French President Emmanuel Macron, investment in infrastructure, more family-reunion rights for refugees and shoring up pensions. Merkel is under pressure from conservatives in her bloc to avoid too many concessions.

While Merkel emerged victorious but weakened from the election, the SPD may face an existential threat.

“There’s a lot at stake if the SPD goes for a new grand coalition,” Brzeski said. “It risks losing its profile and thereby committing political suicide.”