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Merkel Gets Energy Deal as Self-Imposed Coalition Deadline Nears

Photographer: Michele Tantussi/Bloomberg

To tackle one of the most hot-button issues during the campaign, Germany’s rising electricity prices, negotiators in a sub-group agreed over the weekend to slow the expansion of land and sea-based wind power to cut the cost of the country’s unprecedented switch from nuclear energy to renewable sources. Close

To tackle one of the most hot-button issues during the campaign, Germany’s rising... Read More

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Photographer: Michele Tantussi/Bloomberg

To tackle one of the most hot-button issues during the campaign, Germany’s rising electricity prices, negotiators in a sub-group agreed over the weekend to slow the expansion of land and sea-based wind power to cut the cost of the country’s unprecedented switch from nuclear energy to renewable sources.

German Chancellor Angela Merkel’s bloc and the Social Democrats stitched together an agreement on renewable energy as the parties close in on a self-imposed deadline to draft a coalition accord by the end of the month.

The weekend deal on one of Merkel’s third-term priorities gives fresh impetus to a meeting at 3 p.m. in Berlin today of 75 negotiators from her Christian Democratic Union, its CSU Bavarian sister party and the Social Democrats. The talks are the first “open-ended” round, without a fixed finishing time, as negotiators forge a common platform for government.

“A little bit of speed now on agreeing on coalition policy would be helpful,” Mark Kayser, a professor of politics at Berlin’s Hertie School of Governance, said in an interview. “Merkel’s European partners all know she’s at the helm but don’t know the potential clamps the new coalition may put on policy.”

Seven weeks after Merkel’s record election victory, she is still more than a month away from being sworn in at the head of a “grand coalition.” As Merkel prepares for a trip to Paris tomorrow, negotiators at home still need to find common ground on a minimum wage, pensions, finances and the detail of Europe’s banking union before a draft coalition accord is put to a vote of the SPD’s 470,000 members in December.

“Confidence is growing only slowly” among the SPD negotiators, Thomas Oppermann, the party’s whip in parliament, said in an interview with the Tagesspiegel newspaper published yesterday and carried on the SPD website. “We’re still far away from a result that we can put to SPD members.”

Offshore Wind

To tackle one of the most hot-button issues during the campaign, Germany’s rising electricity prices, negotiators in a sub-group agreed over the weekend to slow the expansion of land and sea-based wind power to cut the cost of the country’s unprecedented switch from nuclear energy to renewable sources.

The plan would cut the target for offshore wind turbines to 6.5 gigawatts by the end of this decade, and to 15 gigawatts by 2030, from 10 gigawatts and 25 gigawatts respectively.

Merkel has said one of the chief priorities of her new government will be to overhaul Germany’s 13-year-old EEG clean-energy subsidy law that has helped land Germans with the second-highest power prices in the European Union. Merkel reiterated that message in her weekly podcast released Nov. 9, saying the EEG has led to a “cost explosion” that must be tamed.

Paris Meeting

Merkel, who has been largely absent from public view as she steers the coalition talks, will meet with French President Francois Hollande for talks on tackling youth unemployment that is above 50 percent in some European countries. Finance Minister Wolfgang Schaeuble is then due to attend a two-day meeting of fellow European finance ministers in Brussels from Nov. 14.

Also that day, Social Democratic members assemble in the eastern German city of Leipzig for a three-day national party convention that will re-elect the SPD leadership in a test of backing for the direction of coalition negotiations so far.

Merkel and SPD Chairman Sigmar Gabriel have reached initial agreement on how cabinet posts will be divided up, with Gabriel set to become vice chancellor, Der Spiegel reported in this week’s magazine, citing senior party sources it didn’t name.

Today’s meeting of the top 75 negotiators is due to consider accords reached earlier by working groups on energy, rent controls and on measures to counter lower rates of pay for women, Bild newspaper reported.

“Of course the negotiations will last a certain amount of time,” Volker Kauder, the parliamentary caucus leader of Merkel’s CDU/CSU bloc, was cited as saying in an interview with Bild. A coalition contract will not be ready before the final week of November, since “we need to put together a common program for four years,” he said.

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net; Brian Parkin in Berlin at bparkin@bloomberg.net

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

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