Merkel, Social Democratic Party set to start coalition talks

Positions pivot on economy in Germany

BERLIN — Chancellor Angela Merkel and Social Democratic Party leaders agreed Thursday to start official coalition talks, opening the path to forming Germany’s next government.

Negotiations were scheduled to begin Oct. 23, a day after German lower house lawmakers reconvene and the day before Merkel, strengthened by the biggest election victory since German reunification on Sept. 22, attends a European Union summit.

The Social Democratic Party team ‘‘has the impression that negotiations make sense’’ and there’s ‘‘a common foundation’’ to try and reach a coalition deal with Merkel’s Christian Democratic bloc, party chairman Sigmar Gabriel said in Berlin after a third round of preliminary talks between the two sides.


Almost four weeks after Merkel won a third term in national elections, Gabriel’s Social Democratic Party has to show it is fighting to secure at least part of its platform if it joins Merkel as junior partner to govern Europe’s biggest economy. National Social Democratic Party delegates meet in Berlin on Oct. 20 to vote on the leadership’s proposal to begin coalition talks, which will probably take weeks.

Get Today's Headlines in your inbox:
The day's top stories delivered every morning.
Thank you for signing up! Sign up for more newsletters here

‘‘It became clear that we recognize the challenges Germany faces over the next four years,’’ Hermann Groehe, the general secretary of Merkel’s Christian Democratic Union, told reporters separately. ‘‘We have sufficient common ground to govern our country together successfully.’’

The Social Democratic Party will agree to enter into a coalition because alternatives such as new elections would backfire and cost it votes, said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels.

‘‘The SPD is being forced into this coalition even if many people in the party don’t like it,’’ he said by phone. Yet the party fears ‘‘not clinching an alliance with Merkel even more than the acute challenges of forming such a coalition.’’

Merkel, 59, was left with the Social Democratic Party as sole negotiating partner after her bloc and the Greens failed to bridge differences on tax increases to pay for infrastructure, a Green demand that Merkel rejected as ‘‘poison’’ for the economy during her campaign. The Social Democratic Party, which also campaigned on tax increases, is demanding a minimum hourly wage of $11.62 as a condition of entering government.


While Gabriel said negotiators didn’t discuss policy details in the preliminary talks, bargaining is already under way. A leader in Merkel’s bloc, Bavarian Prime Minister Horst Seehofer, broke ranks, saying he is ready to take up the Social Democratic Party’s minimum-wage demand, which Merkel rejected during her campaign.

Wages and taxes are among the disputes on the table. Merkel regards her no-new-taxes pledge as one of two red lines in talks with the Social Democratic Party, which wants to raise the top income tax rate to 49 percent from as low as 42 percent. The other taboo is joint euro-area bonds, with all other topics, including minimum wages, open to negotiation, according to a person familiar with her strategy.

As the Social Democratic Party sticks to its minimum wage demand, Merkel favors an industry-by-industry approach through collective bargaining.