German Chancellor Angela Merkel’s conservatives have begun talks with the center-left Social Democrats (SPD) with the goal of having a new “grand coalition” government in place by Christmas.
The parties have created 16 working groups that are charged with proposing policy compromises on a range of issues, from economic and banking policy, to the euro and energy.
Below are the latest details on the talks, comments from participants, and media reports:
* The working group on bank regulation, Europe and the euro held its first meeting on Monday. They both agreed to push for a financial transactions tax. They also agreed that Germany should push forward European integration and focus European finances more on growth, employment and innovation. They said however they needed to consult further on a common stance on a European banking union. There had been no discussion of euro bonds.
* A separate working group on finance, budget and federal-state financial ties also met on Monday but failed to reach any agreement. The group will meet again on Wednesday.
* Weekly Der Spiegel reported at the weekend that SPD Chairman Sigmar Gabriel planned to leave Merkel’s conservatives the powerful finance ministry in a new cabinet in order to wring concessions from her on other issues. The article said Gabriel wanted to become economy minister with additional responsibilities for energy and environment. Gabriel denied that there had been any discussion so far on which parties would get which cabinet posts, and who might fill them.
* Der Spiegel, in a separate article, said Merkel was prepared to make concessions on more pro-growth/anti-jobless policies, including more of a euro zone fiscal capacity/budget, in exchange for the SPD ruling out mutualised debt and agreeing to greater central controls over national budgets in the euro zone.
* Finance minister Wolfgang Schaeuble confirmed in an interview with Focus magazine that his conservatives were no longer insisting that projected budget surpluses from 2015 be used to pay down Germany’s debt.
* Hubertus Heil, lead negotiator for the SPD in a working group on the economy, told Reuters that his party wanted stricter limits on arms exports. “We want to prevent that German weapons end up in crisis regions,” he said.