SPD demands support for EU reform as price of Merkel coalition

Germany’s Social Democrats (SPD) have said they will not support a fourth Angela Merkel government without a radical rethink of Berlin’s EU policy.

On Friday morning a crotchety SPD leader, Martin Schulz, criticised speculation that initial talks with Dr Merkel and her Christian Democratic Union (CDU) the previous evening had opened the door to renewed co-operation in Berlin.

“The reports of a ‘green light’ for grand coalition negotiations are wrong,” said Mr Schulz. He said he had contacted Dr Merkel to complain about CDU spin and “speculation that is not acceptable ... and destroys trust”.

The motivation for Mr Schulz’s bad cop routine is twofold. First: a face-saving exercise after he was strong-armed by SPD officials into talks he had ruled out twice before. Second: next Thursday’s SPD party conference, where Mr Schulz will face rank-and-file sceptics who believe another term in office is the last thing their ailing party needs.

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The SPD has spent two terms in government with the CDU since 2005 and just 36 per cent of SPD members back a grand coalition rerun. But even fewer, 13 per cent, are in favour of a new election, according to a Forsa poll.

With an eye on those numbers, Mr Schulz said on Friday that “all options” remained on the table – including SPD support for a minority Merkel government.

The centre-left leader has also staked out his first demands for his party enabling a fourth Merkel term, including an embrace of French president Emmanuel Macron’s EU reform proposals.

"German euro politics has to change," said Mr Schulz in an interview with Saturday's Spiegel magazine. "Giving a positive answer to Emmanuel Macron will be a core element of any negotiations with the SPD."

Macron wish list

Mr Macron has called for radical overhaul of the euro zone, equipping the single currency bloc with its own finance minister and investment budget.

The CDU is cool on these ideas, fearing anything that looks like a transfer at German taxpayers’ expense, but the SPD plans to deploy its political leverage to change Dr Merkel’s mind.

“We need a new founding of Europe,” said Mr Schulz, promising to push for German backing for a common EU social policy and unified standards in economic policy.

On the domestic front, the SPD calling for the abolition of Germany’s public-private health system and for greater spending on education and infrastructure.

Two months after their worst result in almost 70 years, the CDU is still reeling from the collapse of coalition talks with the liberal Free Democratic Party and Greens. Dr Merkel and her allies are making the best of their political dependence on the SPD.

After a humiliating, historical election disaster of their own, SPD officials are clearly enjoying this rare sense of power over Dr Merkel.

With the chancellor heading a caretaker government, Mr Schulz said on Friday that he saw “no time pressure”.

“We are a proud and confident party,” he said. “And the SPD will draw on this pride in negotiations – not fear.”

At this rate, one CDU politician sighed on Friday, Germany will be lucky to have a new government by March.