Fate of Germany's future government hangs on SPD members' vote

Fate of Germany's future government hangs on SPD members' vote

The deal, reached in record time to end months of political paralysis after Merkel had failed to form a coalition with two smaller parties, faces its first test when the SPD's membership vote from February 20 on whether to ratify a deal many never wanted.

Her appointment comes 18 years after the SPD's regular political rivals, the conservative Christian Democrats, elected its first female leader: Angela Merkel.

"There is very little enthusiasm in the party over the loss of ministries", Daniel Günther, the regional prime minister of Schleswig-Holstein said.

That put him in the camp of Social Democrat Gerhard Schroeder, Merkel's predecessor as chancellor, who clashed with his party 15 years ago over labor-market and welfare changes he pushed through to fight record unemployment at the time.

The deal, which would end months of political paralysis after Merkel had failed to form a coalition with two smaller parties, will be tested when the SPD's membership vote early next month on whether to ratify it.

Hamburg mayor Olaf Scholz, a Social Democrat, has been tapped as finance minister, according to German media reports.

He also noted that a benchmark salary increase secured by Germany's largest trade union this week was "fully in line" with the ECB's inflation forecasts.

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Merkel has relied on exactly this coalition for two of her three four-year terms.

All of this could go down well with SPD party members, who will vote on any final coalition deal.

Merkel, Europe's most experienced leader, has seen her standing at home and overseas weakened by the longest stretch of coalition-building in the country's postwar history.

According to the coalition deal, the parties agreed to support Macron's reform drive and tentatively backed his idea of a eurozone investment budget. Mass-selling daily Bild said Merkel had sold out. Die Welt took a pessimistic view, calling the deal "Merkel's last contingent" and going on in its lead story to question whether Germans would take this new government seriously. The political risk for Merkel is that her concessions to the SPD will embolden more critics to come out into the open.

Merkel's Christian Democratic Union, under the agreement, would gain the economy ministry while giving up the interior and finance spots. Many in the party see the Chancellor as the source of their current electoral misfortunes, and the party's youth wing, now growing fast, is particularly against any power-sharing with Dr Merkel.

But, the European Union official said, the avowed willingness to pay more into European Union budgets was an important signal after the Schaeuble years: "You have a change from a policy of closed wallets to a policy of a wallet that is at least open a little bit", he said.

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