(Bloomberg) -- German Chancellor Angela Merkel's bloc and the Social Democratic Party have agreed on the ministries each will get in a coalition government, people familiar with the matter said.
The parties are still discussing other sticking points, said the people, who asked not to be identified discussing the private negotiations. The Social Democrats are poised to take the Finance Ministry, a member of that party said.
The SPD will get the finance, foreign, and labor ministries, according to a person familiar with the talks. German media said Merkel's Christian Democrats will fill the defense and economy posts and the CDU's Bavarian sister party will get the Interior Ministry.
The deal was worked out by a core of about 15 leaders and must now be approved by a broader group of roughly 90. While the pact clears a key hurdle to a fourth term for Merkel, the SPD's pledge to let its 464,000 members vote on the agreement augurs several more weeks of uncertainty.
Henrik Enderlein, a professor of political economy at the Hertie School of Governance, said on Twitter that Merkel had made “major concessions” by giving up key ministries to the SPD and the Bavarian Christian Social Union. The move will surely “cause grumble” in her party, Enderlein tweeted.
Any coalition deal will hinge on how well Social Democratic leader Martin Schulz, the challenger Merkel defeated in September, can sell the pact to a party base that's chafing at the idea of helping the Christian Democrats govern for the third time since 2005.
Minority Government
His success will depend on whether members agree that the policy platform bears enough of the SPD's stamp to warrant another stint in government. If members reject the pact, Merkel would have to choose whether to pursue a minority government reliant on opposition votes to pass legislation, or to return to the ballot box for an election that polls suggest would resolve nothing.
Four years ago, 76 percent of the SPD's rank and file voted to join Merkel's government, but the mood is more divisive this time. Many members blame the party's electoral decline on its role as junior partner for two of Merkel's three terms and say the Social Democrats would do better to rebuild in opposition rather than join her again.
The protracted deadlock has restricted Germany on the global stage just as France's Emmanuel Macron calls for reshaping the European Union, U.S. President Donald Trump disrupts the global trading order, and China expands its muscle. More than four months after her party bloc won an inconclusive national election, Merkel, 63, remains chancellor only in an acting capacity.
Another alliance between Merkel's Christian Democratic-led bloc and the SPD, a “grand coalition” between the two biggest parties, appeared almost impossible after the Sept. 24 election, when the SPD suffered its worst defeat since World War II. Schulz initially vowed he wouldn't again enter a cabinet with the chancellor who's led Germany for 12 years.
He changed position after Merkel's bid to form a multi-party government with the Greens and the pro-market Free Democrats collapsed in November. German President Frank-Walter Steinmeier helped prod the CDU and SPD to the negotiating table, saying the country needs a stable government rather than a repeat election.
Merkel's struggle to form her fourth government reflects Germany's increasingly fragmented party landscape and the rise of the anti-immigration Alternative for Germany, the first far-right party to win seats in the Bundestag, or lower house, since just after World War II.
For its part, the SPD put each step to party delegates, with two conventions in the last two months. Marathon exploratory talks in January produced deals on migration, health care and spending, but the restive base was still unsatisfied. Delegates on Jan. 21 agreed to begin formal coalition talks after Schulz promised to seek more policy concessions.
To contact the reporters on this story: Arne Delfs in Berlin at adelfs@bloomberg.net, Birgit Jennen in Berlin at bjennen1@bloomberg.net.
To contact the editors responsible for this story: David Rocks at drocks1@bloomberg.net, Alan Crawford at acrawford6@bloomberg.net.
©2018 Bloomberg L.P.
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