Germany's CDU and SPD parties reach coalition deal

Angela Merkel's conservatives and the Social Democrats have agreed on a coalition deal

Angela Merkel's conservatives and the Social Democrats have agreed on a coalition deal

German Chancellor Angela Merkel's Christian Democratic Union on Wednesday announced it had finalized an agreement with the center-left Social Democrats after months of political stalemate following the federal election a year ago.

If approved, the agreement would give control of the foreign ministry, finance ministry, and the labor and social ministry to the party, which is led by former European Parliament president Martin Schulz.

The CDU will get the economy and defence portfolios and, in a move created to stop more voters turning to the rightwing Alternative for Germany (AfD) party, Mrs Merkel's Bavarian ally Horst Seehofer - who takes a tough line on immigration - will become interior minister.

The CDU/CSU bloc and SPD reached a tentative coalition deal on January 12, following several weeks of preliminary discussions, while the SPD's Congress on January 21 backed entering coalition negotiations with the conservatives.

Germany's two main political parties look set to form a grand coalition government under Angela Merkel. Shultz and the SPD had vowed to stay out of another coalition with the CDU but later reversed course to form a new GroKro.

In her first public comments since the deal, Mrs Merkel said many conservatives would not be happy with the handover of the ministry to the SPD.

"Regardless of whether a ministry is led by the Social Democrats or the (Christian Democratic) Union, you can only spend the money you have", Merkel said.

According to the coalition deal, the parties agreed to support Macron's reform drive and tentatively backed his idea of a eurozone investment budget.

Martin Schulz, the SPD leader who has called for the creation of the so-called United States of Europe by 2025, will become foreign minister, allowing him to shape Germany's policy on Europe over the next four years.

Germany has been in limbo since an inconclusive September election left Merkel and her CDU/CSU bloc without a ruling majority, leading to the longest coalition negotiations in postwar history and weakening the veteran chancellor's leadership.

Chancellor Angela Merkel's conservatives and the Social Democrats (SPD) have agreed on a formal coalition deal, a conservative politician and a source involved in the negotiations said on Wednesday. The results of the vote are expected by March 4.

Leaders will go before the press in the early afternoon to present their coalition agreement, which stalled on bad-tempered disagreement on health and labour reform.

The SPD, however, won assurances that family reunifications for refugees would resume in August, albeit restricted to 1,000 people a month.

"I'm completely happy with the coalition agreement", European Union finance commissioner Pierre Moscovici told journalists in Brussels.

The EU is more likely to succeed "when Paris, Brussels and Berlin are pulling together", said Moscovici, adding that there were "common concepts" between the three capitals.

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