Merkel, Greens Agree on Second Round of Coalition Talks

Chancellor Angela Merkel and Germany’s Greens agreed to hold a second meeting aimed at a possible coalition after talks yesterday, raising the chance of an alliance and piling pressure on the Social Democrats.

The three-hour meeting brought closer the prospect of a third German government under Merkel, who told her Christian Democratic lawmakers this week that she wants clarity on a future coalition by Oct. 22 when the newly elected parliament convenes. Merkel’s bloc will meet SPD negotiators on Oct. 14 and will meet again with the Greens on Oct. 15, CDU Secretary General Hermann Groehe told reporters in Berlin.

“There was a positive mood” in the talks, Greens co-leader Cem Oezdemir said at a press conference. Claudia Roth, the other Greens leader, called the meeting “constructive.”

With the Greens party leadership in transition, a gulf in policy with Merkel’s side, a membership wary of a coalition and open animosity with Merkel’s Bavarian allies, the Greens had voiced skepticism of finding common ground.

Alexander Dobrindt, the secretary general of Merkel’s Bavarian Christian Social Union sister party, warned there was a bigger policy gap between the CDU/CSU and the Greens than with the SPD. Groehe said the CDU/CSU and Greens shared common aims for the European Union and the euro.

Grand Coalition

Merkel’s Christian Democratic bloc and the SPD ruled together in a “grand coalition” during Merkel’s first term from 2005 to 2009.

Wielding the option of Germany’s first federal tie-up with the Greens gives Merkel leverage as she sounds out the SPD. The negotiations pose difficulties for the Greens, preoccupied with replacing their leaders after suffering losses in the Sept. 22 election.

The Greens face a challenge with Merkel’s fraction after calling for higher taxes under lead candidates Juergen Trittin and Katrin Goering-Eckardt, a strategy that many in the party blamed for its losses in the polls. The party won 8.4 percent of the vote, down 2.3 percentage points from 2009. Merkel called new taxes “poison” during the election campaign.

Goering-Eckardt said her party and the Christian Democrats differ on topics such as climate policy and pooling euro-area debt, which Merkel rejects. “I don’t have the sense after last night’s talks” that the two parties can form “a stable, sustainable government for a span of four years,” she said on Deutschlandfunk radio today.

Energy Differences

Another stumbling block is the energy switch, a 550 billion-euro ($745 billion) plan to shutter nuclear reactors and raise the share of renewables to 80 percent of the power mix by 2050 from about 23 percent now. The Greens seek to exit coal-fired power generation and speed up the transition to renewable sources such as solar and wind, while Merkel has said her focus is to change clean-energy subsidies to cut the project’s costs.

A new coalition will almost certainly take longer to forge than after the last election in 2009 where talks took just over a month. While SPD General Secretary Andrea Nahles has said that talks might last until January, the party’s commitment to hold a membership ballot on any coalition deal lends itself to a vote around the time of its convention in Leipzig in mid-November.

A government combining Merkel’s bloc and the Social Democrats, the two biggest forces in the Bundestag, is favored by 66 percent of voting-age Germans, compared with 37 percent who favor her governing with the Greens as junior partner, according to an Infratest poll for ARD television published yesterday.

‘Cautious Merkel’

Christian Schulz, an economist at Berenberg Bank in London, put an 80 percent bet on a repeat of the grand coalition, from Merkel’s first term. “The typically cautious Merkel will probably still prefer the tested combination with the SPD,” Schulz said in a note today.

Merkel, 59, remains Germany’s most popular politician with a 67 percent approval rating in the ARD poll, while Hannelore Kraft, the premier of North Rhine-Westphalia state, is the most popular Social Democrat at 52 percent. The Sept. 7-8 poll of 1,012 people has a margin of error of as many as 3.1 percentage points.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Tony Czuczka in Berlin at aczuczka@bloomberg.net;

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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