Merkel entering final stage of make-or-break talks

Merkel entering final stage of make-or-break talks

Germany inched toward a new government Friday as Chancellor Angela Merkel and the centre-left Social Democrats agreed to move ahead with formal talks to build a coalition.

"We have achieved outstanding results", said the Social Democrats' leader, Martin Schulz.

Germany's Christian Democratic Union (CDU), the Christian Social Union (CSU) and the Social Democratic Party (SPD) have reached a breakthrough to begin official talks on coalition. Then, if those talks are successful, he must steer a coalition deal through a ballot of the full party membership.

After nearly 24 hours of marathon talks, there was still no agreement in sight between Merkel's conservatives and the centre-left Social Democrats (SPD).

"If we succeed, these could be four very, very good years", Seehofer said. That decision was popular with members.

However, Schulz changed course after Merkel failed late a year ago to form an alternative coalition government with the Liberals and the Greens. "The paper we produced is not a superficial paper, but shows that we worked hard on it".

Looming over the big parties is Alternative for Germany, or AfD, the first far-right faction to enter the federal parliament since the 1950s.

In the draft pact, announced on Friday, the parties agreed to limit the arrival of asylum seekers to around 200,000 a year, and to work with France to strengthen the Eurozone.

Germany also regularly comes under criticism over its massive trade surplus, the world's largest which swelled to around €250 billion previous year.

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Chancellor Angela Merkel's conservatives and the Social Democrats on Friday pledged to work closely with France to strengthen the euro zone.

Led by Merkel and Schulz, the two sides have been sounding each other out since Sunday to determine if there's enough common ground to forge a joint platform on policies from migration and climate to deeper integration of the euro area and relations with Emmanuel Macron's France.

And to fund that, it wants the top tax rate to be raised to 45 per cent from the current 42 per cent. Apparently, Merkel is more than willing to give Schulz what he wants if it means she can stay in power. Should the outcome be fruitful, it may pave the way to forming a grand coalition of the two biggest parties.The parties clashed over a number of crucial issues, including refugee policies, the future of the European Union and budgeting.

"In the seemingly long period of time since the election, we've seen that the world is not waiting for us", said Merkel.

The SPD's youth wing chief Kevin Kuehnert said he would embark on a national tour to press his case against a new grand coalition, known as "GroKo" in German political shorthand.

"We must find an agreement", he said Sunday as he entered into the exploratory talks.

France and Bulgaria, which now holds the rotating European Union presidency, welcomed Friday's developments. "It is a significant, positive, forward-looking contribution to European policy debate in Europe", he added.

However, he has been forced to wait for months for a concrete response from Merkel, who has come under mounting criticism at home and overseas for her plodding reaction to Macron, aggravated by her struggle to form a new government.

President Frank-Walter Steinmeier reminded all sides that they "have a responsibility towards Europe and for reliability, partnership and engagement in global politics".

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