(Bloomberg) -- German Chancellor Angela Merkel's talks on renewing her government alliance with the Social Democrats are coming to a head, with negotiators saying they'll seek a yes-or-no decision on Tuesday.
Negotiations were extended for a second day as SPD leaders seek to wring concessions on labor and health-insurance rules from Merkel's Christian Democratic-led bloc. The goal is to conclude a draft coalition pact that the Social Democrats can put to a membership vote.
“We agree that tomorrow is the decisive day,” SPD general secretary Lars Klingbeil told reporters on Monday. “It will be decided tomorrow whether we successfully close the talks or not. All of us are willing to get a solution, but the talks are contentious.”
The Social Democrats are holding out for selling points to present to the party's base in the ballot. That increases pressure on Merkel to offer policy concessions to her prospective junior partner so she can start her fourth term.
Member Ballot
More than four months after her CDU-led bloc won an inconclusive national election, Merkel remains at the helm as acting chancellor. After serving as her junior partner for eight of her 12 years in office, many SPD members blame the last four years with Merkel for the party's electoral decline to a post-World War II low.
Any coalition pact will be put to a vote by the SPD's more than 440,000 members. A rejection would force Merkel to consider governing without a stable parliamentary majority or put Germany on track for another election, which polls suggest would turn out largely like the last one in September.
Two key SPD demands remain on the table: curbing the use of temporary work contracts, and overhauling the national health-care system to prevent doctors from billing higher fees for privately insured patients. The CDU and its Bavaria-based CSU sister party have balked at both.
The Hurdles That Remain to Merkel's Fourth Term: QuickTake Q&A
Merkel's bloc and the Social Democrats agreed on a preliminary blueprint last month that provoked protests by SPD activist factions. An SPD party convention on Jan. 21 backed formal coalition talks with a 56 percent majority after party head Martin Schulz pledged to seek concessions on migration, labor and health care.
While two polls last week suggested that support for the Social Democrats has declined to a new post-World War II low of 18 percent, an FG Wahlen survey said support for renewing the “grand coalition” with Merkel's bloc is increasing among SPD supporters, with 59 percent in favor.
Schulz said negotiators agreed on European policy goals on Monday, including an investment budget for the euro area and “fair taxation” of companies such as Google, Apple, Facebook and Amazon.
--With assistance from Rainer Buergin and Birgit Jennen
To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net, Arne Delfs in Berlin at adelfs@bloomberg.net.
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Tony Czuczka, James Regan
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