Merkel offered confidence-and-supply type arrangement

Germany’s Social Democrats (SPD) have floated a confidence and supply-style arrangement as a way to support chancellor Angela Merkel’s fourth term in office.

Ahead of exploratory talks in Berlin on Tuesday, more than 10 weeks after a disastrous federal election, SPD leader Martin Schulz has suggested a “co-operation coalition” deal on a dozen headline policies.

The rest could be negotiated during a four-year term, suggested Mr Schulz, upending Germany’s practice of formal coalitions and detailed government programmes.

Leading SPD strategists believe that, in a looser alliance, voters would give their party greater credit for progressive policies than previously the case in grand coalition.

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If blocked by Dr Merkel’s CDU, the SPD would be free to find an alternative parliamentary majority.

SPD general secretary Lars Klingbeil says his party is open to all possibilities, including a renewed coalition with conservatives or a minority government. “The ball is now in Dr Merkel’s court,” said Mr Klingbeil.

After Dr Merkel’s demands for “speedy talks”, Mr Klingbeil said the pace of negotiations depended to a large extent on what concessions Dr Merkel and her allies were prepared to make.

Open-ended talks

Last week, SPD delegates voted overwhelmingly in favour of open-ended talks with the CDU and its CSU Bavarian allies.

A poll of SPD members for private broadcaster RTL showed 71 per cent favoured such talks while 81 per cent called on the party to push hard.

The centre-left SPD wants greater social and infrastructure spending, reform of the two-tier health system and a more energetic response to French EU reform proposals.

Dr Merkel is undecided on the first, chilly on the second and increasingly warm – if vague – on the third.

Ahead of Tuesday’s talks, the CDU leader suggested re-opening the Élysée Treaty to allow for closer Franco-German co-operation, such as on harmonised corporate tax rates.

French president Emmanuel Macron is calling for an EU investment fund, managed by a Brussels finance minister. The German leader refuses to be pinned down on EU reform details, but insists the EU offers the best chance for Europe to remain relevant in a globalised world.

“I believe that is a historical necessity and I don’t think I am exaggerating when I say the world is waiting for us to be able to act,” she said.

“Europe doesn’t just need a stronger economic and monetary union, we must also have a Europe of security and the rule of law, internally and externally.”