Germany's Angela Merkel embarks on new talks to type authorities

German coalition talks enter crunch stage amid ongoing setbacks

Although both parties have agreed to a media blackout while talks are underway, reports suggest both have agreed to drop the 2020 carbon reduction target, establish national high-speed internet infrastructure by 2025 and to implement skilled migration targets. Some fear further association with Merkel's chancellorship could erode the influence of the SPD which suffered the worst result in September's election since the modern Federal Republic was founded in 1949.

Before they can proceed to formal talks, the SPD leadership needs to secure the agreement of a special party convention, scheduled for January 21.

SPD leader Martin Schulz has vowed to put any agreement with the conservatives up for a vote by party members, many of whom are opposed to another coalition of the two largest parties in parliament.

"The mood is like the weather", Ralf Stegner, one of the SPD's deputy leaders, said as he gazed at the cloudy sky above Berlin ahead of yesterday's talks, as reported by Reuters.

Merkel has ruled with the SPD in a sometimes awkward grand coalition in two of her three previous terms in office, including in the last parliament from 2013-2017.

"A fresh start for Europe is also a fresh start for Germany", Merkel said.

Aware the world was watching, she was unwilling to allow talks break up without agreement. "If we join a government it will be on the condition that it makes Europe strong".

The 28-page deal reached in a marathon negotiating session that lasted more than 24 hours at the end of almost a week of talks was enough for leaders of Merkel's two-party Union bloc and the Social Democrats to recommend moving on to formal coalition negotiations.

"The European Union's member countries need more cohesion, not less", Schulz told reporters.

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Even though leaders appear to have pulled off an agreement after their all-night session, the preliminary coalition agreement may yet fall apart.

Kevin Kuehnert, head of the Jusos youth branch of the SPD, said he planned a "NoGroKo" tour of Germany to persuade party delegates to vote against the grand coalition. All going well, a new government in Berlin is not likely before Easter.

Mrs Merkel admitted there had been hard "blockages" during the Berlin talks.

And if they back full talks, entering government hinges on a second poll, of all SPD members, on any final coalition deal. While the German economy goes from strength to strength, her Christian Democratic-led bloc and the Social Democrats are seeking to hold a political center that's been eroded by the rise of the far-right Alternative for Germany.

Schulz also stressed the importance to the SPD of reaching an agreement for a makeover of the European Union, with his party wanting Berlin to back French President Emmanuel Macron's European Union reform plans.

"The mood of the party rank and file with regards to a grand coalition is still grim".

"Germans have been waiting for their new government for more than 100 days", Bild, the country's most-read daily newspaper, said in an editorial.

"They will either only do cosmetic politics and lazy compromises", predicted Prof Rudolf Hickel, of the University of Bremen, "or we will have a government where they'll fight over details day and night".

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