Merkel, SPD clinch deal

Germany on track to have a new govt

BERLIN, Nov 27, (Agencies): Chancellor Angela Merkel’s conservatives and the centre-left Social Democrats (SPD) clinched a coalition deal early on Wednesday that puts Germany on track to have a new government in place by Christmas.

The agreement was struck roughly two months after Merkel was the clear winner in national elections but fell short of a parliamentary majority, forcing her into talks with the arch-rival SPD, with whom she ruled in an awkward “grand coalition” during her first term as Chancellor from 2005-2009.

The deal, spelled out in a detailed 185-page policy document, will not be final until approved over the coming weeks by a postal ballot of the 474,000 card-carrying SPD members, many of them sceptical about partnering with Merkel again.

But the agreement will be greeted with a sigh of relief in other European capitals. The lengthy talks have delayed movement on major European reforms, including the creation of a “banking union”, an ambitious project designed to prevent a recurrence of the euro zone’s crippling debt crisis.

“The result is good for our country and has a conservative imprint,” said Hermann Groehe, secretary general of Merkel’s Christian Democrats (CDU). “No new taxes and no new debts.”

Martin Schulz, president of the European Parliament and a senior SPD negotiator, called it an “excellent result” for his party.

Merkel and other party leaders was to present details of the deal at a news conference at 12 pm (1100 GMT) on Wednesday. The allocation of cabinet posts was expected to be announced later.

Demands

To clinch the deal, Merkel agreed to SPD demands for a minimum wage of

in London. (RTRS) 14 ETA members freed: A Spanish court on Tuesday freed a further 14 jailed members of Basque armed separatist group ETA, a court source said in Madrid, under a rights ruling that has outraged victims’ families.

Spanish media said those freed included Javier Martinez Izaguirre, who was convicted of an attack that killed a toddler 8.50 euros per hour, which some economists have warned could push up unemployment, particularly in eastern Germany.

In order to prevent that, the wage will be phased in over a period of years, with sector-specific exceptions allowed until 2017, when the wage formally kicks in nationwide.

On European policy, Merkel’s insistence on painful economic reform in struggling euro states will continue, despite SPD promises during the election campaign to take a more pro-growth approach in a single currency bloc ravaged by high unemployment.

A closely watched compromise on banking union between the parties makes clear that the 17 member states have primary responsibility for dealing with their own stricken banks, and can only turn to a common taxpayerfinanced European fund for help when all other avenues have been exhausted.

Carsten Nickel, a political analyst at Teneo Intelligence, said the SPD had realised, after flirting with the idea of common euro-zone bonds, “that the domestic political consensus does not reward any large-scale deviation form Merkel’s path”.

Although the cabinet posts have not yet been announced, Wolfgang Schaeuble, Merkel’s trusted 71-year-old finance minister, is widely expected to keep his job.

Frank-Walter Steinmeier of the SPD may return as foreign minister after holding the post in the last “grand coalition” government. SPD chairman Sigmar Gabriel, who was also a member of that cabinet, could get a beefed-up economy ministry.

Reforms

The SPD remains traumatised by its partnership with Merkel. Left-wingers in the party, already bitter about labour reforms launched by the last SPD chan- in 1991.

Many Spaniards are outraged by the release of ETA prisoners convicted of deadly shootings and bombings in a violent campaign for an independent Basque homeland in northern Spain and southwestern France.

The European Court of Human Rights in Strasbourg ruled last month that Spain had acted illegally by retroactively cutting short the years of remission that an ETA prisoner had earned from good cellor, Gerhard Schroeder, abandoned the party in droves. In 2009, after four years of “grand coalition”, the SPD scored its worst election result of the post-war era, winning just 23 percent.

Some of those reforms are now being watered down, but the SPD referendum on the coalition deal is still risky, with Alex White, an analyst at J.P. Morgan, estimating the chances of a “no” vote at up to 20 percent.

Were the party to reject the agreement, Merkel could seek a coalition with the environmentalist Greens. A new election is another possibility.

With the talks ending on the Nov 27 deadline set by Merkel, SPD leaders must now persuade members at over 30 rallies that a minimum wage is a victory for the working class.

“We will convince Steinmeier told reporters.

The ballot results are due on Dec 14. At an SPD congress in Leipzig, delegates said they would only decide after reading the coalition document. It shows a very German attention to detail, ranging from banking rules to plans for the 250th anniversary of Beethoven’s birth in 2020.

If the majority are willing to overlook details like the SPD conceding on such a major campaign platform as tax hikes for the rich, and okay Germany’s third “grand coalition” of the post-war era, Merkel can be sworn in the week before Christmas.

SPD chief Sigmar Gabriel, who would be Merkel’s vice chancellor, hopes to convince the base of his 150-year-old party with the policy trophies his team has wrested from the conservatives.

The centre-left daily Sueddeutsche Zeitung said Social Democrats would be wise to back the pact.

“You can’t expect more from a grand coalition than small steps. But is it worth rejecting? Surely not,” it said.

members,” behaviour.

Dozens of other ETA members who had their remissions cut short under the same policy have since been released under the European court ruling. (AFP) Reveals ‘bailout three times’: Spain’s ex-prime minister Jose Luis Rodriguez Zapatero three times turned down offers of a bailout for his country at the height of the euro zone debt crisis, he says in a new book unveiled Tuesday.

Zapatero’s memoir “The Dilemma” recounts some of the most tense moments of the crisis that it was feared would break up the eurozone and led the then Socialist premier to call a snap election for November 2011.

From June 2010 to November 2011, “there were three times when the possibility of asking for financial aid was suggested to me more or less explicitly”, Zapatero told a news conference to launch the book on Tuesday.

The first suggestion of financial help came in June 2010 from the then head of the International Monetary Fund, Dominique Strauss-Kahn.

The following month, the president of the European Central Bank at the time, Jean-Claude Trichet, repeated the hint.

Then in early November 2011, weeks before the snap election, German Chancellor Angela Merkel asked Zapatero at a G20 summit if he would accept a 50-billion-euro ($68 billion) precautionary credit line from the IMF. (AFP)