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.
An agreement between Merkel’s CDU/CSU and SPD, if confirmed, would take Germany a step closer to a new government more than four months after the general election.
Months of political uncertainty has weakened Germany’s role in international affairs and raised questions about how long Mrs Merkel will be able to stay in her job.
While some sources claim that the agreement has been confirmed, another source said the deal has not yet been sealed, saying the parties were still at odds on some issues.
Merkel has struggled to cobble together a government more than four months after a national election, raising concerns among investors and partner countries at a time when Europe is facing multiple challenges – including the need for euro zone reform and Britain’s departure from the European Union.
However, any deal will still be subject to approval by the SPD’s 464,000 members, who must approve it in a postal ballot before their party can move ahead and join another coalition with Merkel after serving as her junior partner from 2013.
The SPD suffered its worst result in a September national election since Germany became a federal republic in 1949 and initially vowed to rebuild in opposition.
However, party leader Martin Schulz changed course and opened negotiations with Merkel after she failed to clinch a coalition deal with the Greens and Free Democrats in November.
Vowing to negotiate until the conservatives “squeal”, the SPD has been trying to extract concessions on healthcare and employment policy that could win over sceptics among its members.
Sources involved in the negotiations said the conservative bloc had reopened topics that had previously been agreed.
Both Merkel’s CDU/CSU bloc and the SPD are under pressure not to concede too much in the negotiations or see their support ebb further.
An Insa poll on Monday showed support for the SPD dropping to 17 percent, below its election result of 20.5 percent.
The conservatives slipped to 30.5 percent, suggesting there would be no majority for a grand coalition if an election were held now.
Nearly there: Media reported that Merkel’s CDU/CSU and the Social Democrats have reached an agreement