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Germany Flirts With Fresh Elections as Talks Hit Funding Impasse

Nov. 19 (Bloomberg) -- Disagreement over policy and financing is forcing German negotiators to delay key decisions on Chancellor Angela Merkel’s third-term government to next week, prompting party officials to raise the prospect of fresh elections.

As coalition talks resumed today in Berlin, Social Democratic negotiator Ralf Stegner said his party is refusing to bow to pressure to make all policy decisions conditional on the availability of funding. Merkel’s Christian Democratic bloc says a commitment to avoid new debt or tax increases must remain the government’s guiding principle and will be reflected in the coalition contract Merkel says she wants by Nov. 27.

“We won’t be able to agree on any coalition accord with finance restrictions or audits on Social Democratic priorities,” Stegner said by phone before the talks. “Most of the difficult issues will only be resolved at the end.”

More than eight weeks after Merkel’s Sept. 22 election victory, negotiators are struggling to overcome differences to swear in a new government by Christmas. With deals elusive on a national minimum wage and cabinet posts, party officials for the first time today publicly discussed the possibility of elections as an option if the talks break down.

“New elections are difficult in Germany for good reason,” Hermann Groehe, the general secretary of Merkel’s Christian Democratic Union, told reporters in central Berlin. “We want these negotiations to be successful, but we aren’t afraid if the voters must decide again.”

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With at least a dozen working groups thrashing out policy differences between the CDU, their CSU Bavarian allies and the SPD, further rounds of talks among the top 75 negotiators are scheduled on Nov. 21, Nov. 26 and on Nov. 27. Should the parties reach an accord, the SPD will put the draft to a vote of its 470,000 members, a process the party says will take about two weeks.

“We have to achieve something substantial on our core priorities such as labor, education and the central issues of equality,” Stegner, one of the 75 negotiators, said in the interview late yesterday. “These things can’t be pushed off until the cows come home.”

Tensions arose after SPD leaders over the weekend faced down opposition among the party base to a so-called grand coalition with Merkel, with SPD Chairman Sigmar Gabriel demanding the chancellor’s bloc “deliver” on policy.

Officials from the CDU and CSU, who together came within five seats of an absolute majority in parliament, responded by saying the result gives Merkel a mandate to implement the policies that she campaigned for during the election.

CSU General Secretary Alexander Dobrindt told reporters today that his party won’t accept a coalition with too many SPD policies. The vote among SPD party members due next month “is alone the problem of the SPD.”

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net; Birgit Jennen in Berlin at bjennen1@bloomberg.net

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

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