* German SPD grassroots members decide whether to join
* New German government could be in office on Tuesday
* Referendum results expected later on Saturday
By Erik Kirschbaum
BERLIN, Dec 14 Germany's Social Democrats began
counting 330,500 postal ballots on Saturday sent in from
grassroots members who are deciding whether their party should
join a coalition with Chancellor Angela Merkel's conservatives.
The results of the referendum are expected to be announced
between 4 p.m. and 6 p.m. (1500-1700 GMT) by SPD chairman Sigmar
Gabriel, who has fought an uphill battle to convince party
members to back the deal with their arch rivals.
Merkel's Christian Democrats (CDU) and their Bavarian sister
party, the Christian Social Union (CSU), won the Sept. 22
election but fell short of a majority. They need a partner and
spent much of the last three months negotiating a coalition
agreement with the SPD, a distant second in September.
To overcome the deep scepticism about joining forces with
Merkel in a "grand coalition", Gabriel took the unprecedented
step of giving all 475,000 SPD members the chance to vote on it.
Conservatives already approved the deal.
"I'd expect about 70 percent to back the agreement," SPD
treasurer Barbara Hendricks told reporters at a warehouse in
Berlin where the ballots were being counted. A truck delivered
crates of postal ballots just after midnight and 400 volunteers
began counting the votes at around 10 a.m. (0900 GMT).
If, as is now widely expected, the centre-left SPD votes in
favour of the "grand coalition" agreement, the coalition
agreement would be signed on Monday and Merkel's new government
could be sworn into office on Tuesday.
Despite her new government having a four-fifths majority in
parliament, Merkel's third four-year term could be more
difficult and more domestically focused than her first two terms
that were heavily shaped by the global financial crisis and
turmoil in the euro zone.
The SPD, still struggling to overcome the steep drop in
support from the 2005-09 "grand coalition" under Merkel, could
prove to be less pliant junior partners this time around.
Thanks to what analysts called a clever strategic move to
ask grassroots members to vote on the coalition, the SPD forced
Merkel to accept many of the SPD's leftist policies even though
the conservatives scored 41.5 percent of the vote in September
compared to 25.7 for the SPD.
The SPD will nevertheless get six of the 15 cabinet posts -
expected to be formally named on Sunday. SPD sources on Friday
said Gabriel would be Vice Chancellor and Economy Minister while
Frank-Walter Steinmeier would be Foreign Minister again.
SPD sources added that Wolfgang Schaeuble would remain