'Breakthrough' agreement reached on German coalition talks

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German Chancellor Angela Merkel and her liberal rival Martin Schulz reached a preliminary deal Friday to begin coalition talks, in a breakthrough that moves the country one step closer to a new government after months of political deadlock.

"I think we have reached excellent results", Schulz said after the conservatives and SPD agreed a blueprint for formal coalition negotiations in exploratory talks.

German President Frank-Walter Steinmeier on Thursday (Jan 11) reminded would-be coalition partners about the high stakes involved - and their responsibility for Europe - as negotiators worked through a tough final evening of talks about forming a new government. But the success of the populist Alternative for Germany, which became the first far-right party to win seats in parliament since World War II, made it impossible for Merkel to command a majority without the support either of the Social Democrats or of a disparate group of minor parties.

The two sides have agreed to a cap on refugees and pledged to draft new limits on the number of family members allowed to rejoin refugees in Germany, according to the position paper that will provide the outline for formal talks.

September's inconclusive elections have meant that Germany has essentially been working as a minority government for four months. Christian Lindner, the leader of the last party, a young looking middle aged narcissist, broke out of the talks, destroying Merkel's option to form the "Jamaica" coalition, named after the colors of the three political parties involved (black, green and yellow).

According to the Reuters news agency, citing the German coalition paper, CDU/CSU bloc and the SPD party have agreed to boost the country's contribution to the European Union budget, devoting specific funds for economic stabilization, social convergence and structural reform support in the Eurozone.

The prospective partners have governed Germany together for the past four years but Schulz, Merkel's defeated challenger in Germany's September 24 election, initially said after the Social Democrats crashed to a disastrous result that they would go into opposition.

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The European Commission President said in Bulgaria: "In terms of the substance I'm very happy with what the CDU/CSU and the SPD have agreed".

Mrs Merkel's centre-right Christian Democrats (CDU) and the centre-left Social Democrats (SPD) both suffered their worst national results for more than 50 years.

A new coalition government would see Merkel at the helm of Europe's biggest economy for a fourth term in office. That vote will likely depend on whether rank and file members are satisfied that the party will have greater influence in a new government than in the previous grand coalition.

The party's leaders are all too familiar with each other.

Immigration is a key issue in coalition talks. "But let's be optimistic, it's a really good start to discuss the future of Europe", said Baasner. For decades, the center-left and center-right had enough votes to lead a two-party coalition, with the junior role generally falling to a smaller party. And Thursday may be the last chance for Chancellor Angela Merkel to strike a deal or face the prospect of a new election.

The most controversial part of the various coalition negotiations has been refugees: not so much the premise of accepting them, but the awkward and inconsistent manner they were handled once they arrived.

"We will make clear in the last day of talks that a new government has to bring about a new departure for the European Union", he said.

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