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Merkel, SPD push ahead in government talks after missed deadline

German Chancellor Angela Merkel gestures while speaking during a news conference in Paris on July 13, 2017.

CHRISTOPHE MORIN/BLOOMBERG

By PATRICK DONAHUE, BIRGIT JENNEN | Bloomberg | Published: February 5, 2018

German Chancellor Angela Merkel resumed talks Monday on extending her government alliance with the Social Democratic Party, sending efforts to break the country's political deadlock into overtime.

With Merkel's fourth term hanging in the balance, a Sunday target date for concluding a coalition pact came and went as the SPD sought concessions on labor and health-insurance rules. The prospects of a deal on Monday are "fifty-fifty," Social Democrat lawmaker Karl Lauterbach, a key negotiator on health care, said on ZDF television.

While the chancellor's Christian Democratic Union sees the talks as being on the home stretch, the Social Democrats are holding out for policy victories they can sell to the party's base, which has the final say on any coalition agreement.

"We're not over the hump yet," Volker Kauder, Merkel's caucus chief in parliament, said as negotiators began the latest round of discussions in Berlin. Volker Bouffier, a CDU member who is state premier of the Hesse region, predicted "a long evening" of talks.

More than four months after her CDU-led bloc won an inconclusive national election, Merkel remains at the helm as acting chancellor. After serving as Merkel's junior partner for eight of her 12 years in office, many SPD members blame the last four years with her for the party's electoral decline.

Any coalition pact will be put to a vote by the SPD's more than 440,000 members. A rejection would force Merkel to consider governing without a stable parliamentary majority or put Germany on track for another election, which polls suggest would turn out largely like the last one in September.

After a breakthrough last week on refugee policy, two key SPD demands remain on the table: curbing the use of temporary work contracts, and overhauling the national health-care system to prevent doctors from billing higher fees for privately insured patients. The CDU and its Bavaria-based CSU sister party have balked at both.

"These are the final outstanding issues," acting Justice Minister Heiko Maas, a Social Democrat, said on ARD late Sunday.

Merkel's bloc and the Social Democrats agreed on a preliminary blueprint last month that provoked protests by SPD activist factions. An SPD party convention on Jan. 21 backed formal coalition talks with a 56 percent majority after party head Martin Schulz pledged to seek concessions on migration, labor and health care.

While two polls last week suggested that support for the Social Democrats has declined to a new post-World War II low of 18 percent, an FG Wahlen survey said support for renewing the "grand coalition" with Merkel's bloc is increasing among SPD supporters, with 59 percent in favor.

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