Key Preliminary Outcomes of the German Coalition Talks

Evarado Alatorre
Enero 13, 2018

The document acknowledges that Europe must increasingly take its fate into its own hands because of policy shifts in the United States and the challenges of a stronger China and more aggressive Russian Federation.

The outcome of six days of exploratory talks that peaked early Friday would raise the cost of labor, worsen competition and ignore the need for tax competitiveness, Ohoven asserted. "The paper we produced is not a superficial paper, but shows that we worked hard on it". After the fractured verdict following the elections a few months back, Merkel has been trying to settle the coalition with few smaller parties but she has been unable to do so.

Substantive talks are only now getting underway, with a deal not expected before April, if one comes at all.

The deal "smells strongly of a continuation of the governing style we know from the last grand coalition, which didn't do much good for society or for the SPD", he said.

The progress in stabilizing Germany's government propelled the euro to a three-year high versus the dollar to trade at $1.2122 as of 11:09 Frankfurt. Still, investors warned of potential hurdles ahead. The sides then need to hash out the actual coalition agreement, which would have to be approved in a ballot of the Social Democrats' entire membership. "It's a breakthrough that leaves a bad taste in the mouth".

Already, the SPD's youth and left-wing factions have renewed calls - made just after the party's electoral drubbing on September 24 - that the SPD should not enter into another coalition with Merkel and instead reinvent itself in opposition.

French President Emmanuel Macron, concerned that a divisive discussion over eurozone reform might undermine his broader European agenda, has begun prioritizing other areas of EU cooperation, French officials say. "So it's going to be a tough day", she said.

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"We want to strengthen the European Union financially, so that it can better fulfill its tasks: which is why we will take this into account during the preparation of our financial framework for the upcoming years", the 28-page document, which the two parties agreed upon, said. The pressure now will be on Schulz to push through the agreement.

The political situation seems to be heading to a finish over the next couple of weeks as Merkel gets ready to start negotiations with the old SPD party.

September's elections which left Merkel without a majority and the SPD with a record low score, saw a surge in support for the far-right AfD.

But this will likely depend on whether she can build on the policy document agreed on Friday and forge what would be her third "grand coalition" - comprising her Christian Democratic Union (CDU), its Bavarian Christian Social Union (CSU) sister party, and the SPD - over the coming months.

He said the terms of the deal were "more favorable" for his vision of a reformed EU than a separate agreement that was discussed and abandoned between the Union and the pro-business Free Democratic Party (FDP) in November a year ago.

While the CDU still came out on top of a fractured field, Merkel was forced to pursue an unwieldy deal among her own conservative bloc, the pro-business Free Democrats and the environmentalist Greens.

"In the seemingly long period of time since the election, we've seen that the world is not waiting for us", said Merkel.

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