German SPD chief says nonetheless "large hurdles" to clear in…

Merkel Schulz reach deal for German coalition

Sean Gallup Getty Images Angela Merkel Martin Schulz

Merkel is betting that after five days of talks, the parties will have laid the groundwork for the start of formal negotiations for a new coalition government with her at the helm for a fourth term in office.

Merkel struck a deal with the Social Democrats on Friday to open coalition talks after months of uncertainty about her political future. "It would be the end for all three if this coalition does not come about".

"There will be hard tasks to come", Merkel said.

German President Frank-Walter Steinmeier on Thursday (Jan 11) reminded would-be coalition partners about the high stakes involved - and their responsibility for Europe - as negotiators worked through a tough final evening of talks about forming a new government. The two groupings control between them 399 seats in the federal parliament, the Bundestag (246 the Christian parties and 153 the Socialists), in a house of 709 deputies.

In their joint blueprint, the parties agreed on key policy outlines - to join European Union partner France in a push to "strengthen and reform" the eurozone, to limit the influx of asylum seekers to Germany to around 200,000 a year, and to refrain from tax hikes given the healthy state of state coffers. Still, Merkel is trying to gain the SPD's support.

Left-wingers, meanwhile, say the SPD gave up its core socialist principles in order to hang on to power.

Strengthening the Franco-German relationship will be good.

"We're not going to draw any lines in the sand, but we want to push through as many red policies in Germany as possible", Schulz said, referring to the representative color of his party.

The document stipulates that the European Union must play a leading worldwide role in climate protection and advocate an ambitious implementation of the Paris Climate Change Agreement. French President Emmanuel Macron has announced ambitious European Union reforms, and needs Germany's help to push them through. In the short term, Germany can wait. "This deal is important for the stability and future of Franco-German relations, but especially Europe".

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"Although it's often that ambition is very strong and when it comes to details there are huge differences between France and Germany".

Questions surrounding Germany s 2015 record refugee influx as well as issues related to the country s finances were sticking points even as Europe s biggest economy posted healthy growth for 2017 and a record surplus.

CDU-CSU and SPD leaders are due to report to their party executives on the outcome of the talks on Friday morning.

The plans bely fears that another "grand coalition" will muddle through for four more years as opposed to making necessary reforms.

"It is a significant, positive, forward-looking contribution to European policy debate in Europe".

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.

Every political career ends, and Merkel's finale may be coming faster than just about anyone had predicted.

The SPD is then set to vote at their party conference in Bonn on January 21 over whether preliminary talks with Merkel's conservatives should progress into formal negotiations.

Even if negotiators find a deal, it can still be torpedoed when SPD delegates and later rank-and-file members get to vote on whether the traditional labour party should once again govern in Merkel s shadow. At best, a government will still not be sworn in by late March or early April, according to some experts.

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