Germany's Standoff Eases as Wrangling Shifts to Coalition Terms

  • Potential partners lay down priorities for revived alliance
  • SPD ‘shouldn’t overdo’ its hand in talks, CDU’s Bouffier says
Bloomberg’s Matt Miller and Rabobank’s Jane Foley discuss Merkel’s efforts to secure an alliance.Source: Bloomberg
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Germany’s political stalemate showed signs of easing as the Social Democrats started haggling over terms of a renewed coalition with Chancellor Angela Merkel’s conservative bloc rather than outright blocking an alliance between Germany’s two biggest parties.

The possibility of the SPD again joining a Merkel-led government in a “Grand Coalition” has unfolded quickly, with the party opening the door only a week after the chancellor’s talks with the Free Democrats and Greens broke down. As the back-and-forth with the SPD gets underway, Merkel, who is scheduled to brief the media later on Monday, made it clear that her coalition partner would have to support a balanced budget and broadly pro-business policies. The list of demands from the SPD includes higher pensions and income tax cuts for low earners.