* Majority of core SPD members polled back talks
* SPD says minimum wage of 8.50 euros per hour essential
* Also demands transaction tax, equal pay and pensions
* SPD chairman says aims to form government before Christmas
* Formal coalition talks could start on Wednesday
By Holger Hansen and Alexandra Hudson
BERLIN, Oct 20 Leaders of Germany's Social
Democrats (SPD) won a green light from their party to start
coalition talks with Angela Merkel on Sunday, after promising to
wring concessions from the chancellor on a minimum wage, equal
pay and infrastructure investment.
Discussions between Merkel and the centre-left SPD on
forming a new government can now begin on Wednesday, a month
after an election saw her conservatives emerge as the biggest
political force but needing a partner to form a majority.
The SPD's willingness to enter talks comes at a price. The
party listed 10 demands it called "non-negotiable", including a
minimum wage of 8.50 euros per hour, equal pay for men and
women, greater investment in infrastructure and education, and a
common strategy to boost euro zone growth.
"We will negotiate hard so that in the end a workable
government emerges. Compromises will be necessary. However the
party considers the following points non-negotiable," the SPD
declaration said, listing a minimum wage in first place.
Merkel's Christian Democrats (CDU) and their Bavarian allies
the Christian Social Union (CSU), favour "wage floors" on a
regional or sectoral basis, set by employers and unions.
Volker Kauder, head of the CDU's parliamentary group, said
he was sure they could reach a deal. Finance Minister Wolfgang
Schaeuble said any new regulation must not threaten jobs.
Germany's leading economic institutes warned on Thursday
that the introduction of a minimum wage could lead to
significant job losses in eastern Germany, where a quarter of
workers earn less than the proposed new amount.
The SPD also demanded equal pensions in the former West and
East Germany, the ability to have dual citizenship, and measures
to make it easier to combine work with family life.
HAGGLING OVER CABINET
Of the 229 senior SPD members to vote, 196 supported the
talks, 31 objected and 2 abstained.
"We aim to form a government by Christmas. That should be
enough time," SPD Chairman Sigmar Gabriel told reporters.
The parties must thrash out policies and a cabinet line-up.
The influential post of finance minister, now held by the CDU's
Schaeuble, is one prize. SPD members have refused to say
publicly which posts they want, but media reports say they may
seek at least six portfolios in the 15-member cabinet.
"In a difficult time for Europe we need the best person
there is. Wolfgang Schaeuble is the best finance minister I can
see out there," Kauder said.
German voters, international investors and Berlin's European
allies have mostly been expecting a "grand coalition" between
the CDU/CSU and SPD, and few expect any partnership deal to
greatly alter Merkel's domestic and foreign policy agenda.
No mention is made in the SPD document of tax increases for
the wealthiest, for which the SPD had campaigned during
September's election but which the chancellor has ruled out.
The SPD wants to avoid a rerun of its 2005-2009 coalition
with Merkel, from which it emerged with its worst election
result since World War Two. Disgruntled SPD members protested
outside the party's Berlin headquarters during Sunday's meeting.
A grand coalition would enjoy an overwhelming majority in
the Bundestag, the lower house of parliament, and find it easier
to push legislation through the Bundesrat, the upper house where
the governments of Germany's 16 federal states are represented.
Such a union began to appear all but inevitable after
Merkel's exploratory talks with the environmentalist Greens
broke down last week, strengthening the SPD's hand.
The SPD will seek final approval of any coalition pact in a
poll of its some 472,00 grassroots members.