German governing coalition fails to settle disputes after 20 hours of talks

BERLIN, March 27 (Reuters) - The three parties in Germany's governing coalition on Monday ended 20 hours of talks without resolving disputes over spending and other issues although Chancellor Olaf Scholz said they achieved "very good progress."

Amid worries about policy gridlock in Europe's largest economy, Germany's first coalition at the federal level, which joins Scholz's Social Democrats, the Greens and pro-business Free Democrats (FDP), has been arguing for weeks or months over various policy initiatives.

The lack of progress and increasing friction between the FDP and the Greens have raised questions about whether Scholz's government will be able to push through its ambitious agenda to modernize the economy.

The coalition talks started at 6:30 p.m. on Sunday and lasted for 20 hours, until a sleep-deprived Scholz and several cabinet members had to jet to the Netherlands for long-planned government consultations.

Scholz, whom critics have accused of not providing sufficient leadership, said the coalition reached "some very good agreements" but did not give details. He said talks would resume on Tuesday.

"Instead of endless arguments we need decisions now, for the good of the country," said the head of the opposition conservative CDU party, Friedrich Merz.

Earlier this month Finance Minister Christian Lindner of the FDP delayed his presentation of the draft budget due to coalition rifts. Notably, the FDP wants to rein in spending while the Greens want to invest more in the transition to a carbon neutral economy.

Economy Minister Robert Habeck last week said someone in government leaked sensitive draft legislation to ban oil and gas heating "in order to damage confidence in the government". The FDP has criticized the proposed ban.

Government officials pointed out that the coalition has agreed on a few initiatives recently including a reform to shrink the bloated parliament.

Yet, the all-night session raised eyebrows since the coalition declared when it took office that it wanted to avoid meetings at night and the weekend, saying this typically impaired decision-making.

Reporting by Andreas Rinke and Sarah Marsh; Additional Reporting by Friederike Heine and Christian Kraemer; Editing by Cynthia Osterman

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Thomson Reuters

Chief correspondent covering political and general news in Germany with experience in Argentina and in Cuba leading Reuters’ broader Caribbean coverage.