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German rivals reach coalition agreement

German Chancellor agrees to form coalition government with campaign rivals Social Democrats after 17 hours of talks.

Last updated: 27 Nov 2013 06:37
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Reports say the SPD scored concessions in areas such as minimum wage and dual nationality law [AFP]

German Chancellor Angela Merkel's conservatives and the centre-left Social Democrats (SPD) have reached a deal in their talks to form a coalition government.

Merkel's Christian Democratic Union (CDU) and their Bavarian Christian Social Union (CSU) allies, winners of the September general elections, came to an agreement with the main opposition SDP early on Wednesday after a marathon of talks that lasted 17 hours.

Parties then formally presented the deal to a meeting of over 70 delegates from all three parties, German state broadcaster Deutsche Welle said.

The SPD scored several key concessions, including introduction of a national minimum wage, while Merkel stuck to her guns on her own red-line issue and blocked higher taxes for the rich, AFP reported quoting its sources.

According to the deal, a minimum wage of 8.50 euros (11.50 US dollars) per hour will be valid from early 2015 to help the country's working poor.

The SPD also pushed through a demand for a 30 percent women's quota on the boards of listed companies from 2016, and an easing of a ban on dual nationality, a key demand of Germany's large Turkish immigrant community, sources told AFP.

Both sides also agreed on pension increases to protect retirees in rapidly ageing Germany, where many elderly are growing scared of suffering poverty in high age.

In all, the additional spending and investment agreed by all sides until 2017 amounts to 23 billion euros, reported national news agency DPA.

The details of the deal are expected to be officially announced later in the day.

Landslide win not enough

CDU/CSU alliance soundly defeated the SPD in the general elections but failed to win a parliamentary majority. The conservative alliance got 41.5 percent of the votes, securing 311 seats in the Bundestag, the German lower house, falling short 316 necessary to form a government.

Merkel's former coalition partner liberal Free Democratic Party's votes fell below the formal electoral treshold of 5 percent, leaving it out of the Bundestag and forcing Merkel to negotiate with the SDP. The talks between the two sides have been going on for several weeks.

The two parties were in a "grand coalition" between 2005 and 2009, which resulted in consecutive election defeats for the SDP.

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