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German parties set to announce coalition deal to end Merkel era

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By Reuters
German parties near coalition deal; Merkel bids colleagues farewell
German parties near coalition deal; Merkel bids colleagues farewell   -   Copyright  Thomson Reuters 2021   -  

<div> <p>By Holger Hansen and Markus Wacket</p> <p><span class="caps">BERLIN</span> -Social Democrat Olaf Scholz was preparing to take over as German chancellor after agreeing a coalition deal on Wednesday that aims to modernise Europe’s largest economy, accelerate its green transition and bring the curtain down on the Angela Merkel era.</p> <p>The centre-left Social Democrats (<span class="caps">SPD</span>) said they would present their three-way agreement with the ecologist Greens and the libertarian Free Democrats (<span class="caps">FDP</span>) at a news conference at 3 p.m. (1400 <span class="caps">GMT</span>) in Berlin following two months of talks.</p> <p>The deal https://www.reuters.com/markets/commodities/main-policy-goals-german-coalition-partners-2021-11-24 will install Germany’s first three-way federal coalition government since the 1950s and end 16 years of Merkel-led conservative government, marking a new era for relations with Europe and the rest of the world.</p> <p>The alliance – named a traffic light coalition https://www.reuters.com/world/europe/jamaica-traffic-lights-or-kiwis-germanys-coalition-conundrum-2021-09-02 after the three parties’ respective colours – has a majority in the lower house of parliament and hopes the government will be sworn in early next month after the parties ratify the coalition pact.</p> <p>It faces immediate challenges, with Germany tackling its worst <span class="caps">COVID</span>-19 surge yet and Europe grappling with the fallout from Brexit and a crisis on the EU’s border with Belarus. </p> <p>Sources told Reuters on Tuesday https://www.reuters.com/business/cop/exclusive-germanys-government-in-waiting-agrees-phase-out-coal-by-2030-sources-2021-11-23 that the parties had agreed to commit to a coal phase-out by 2030 and to end power generation from gas by 2040, reflecting the coalition’s focus on accelerating climate-protection measures.</p> <p>A four-page memorandum on the deal that Reuters obtained on Wednesday showed they had also agreed to raise the minimum wage to 12 euros ($13.45) per hour from 9.6 euros, resulting in a pay rise for around 10 million people.</p> <p>“We are in politics to create a society based on respect,” they wrote in talking points distributed to party officials.</p> <p>Some political analysts fear the parties https://www.reuters.com/markets/europe/germanys-next-government-likely-line-up-2021-11-24 will struggle to bridge ideological divides, which could in turn paralyse the 27-nation EU, in which Germany is a driving force.</p> <p>The parties have so far defied predictions that their coalition talks could last into next year or fail after an inconclusive election in September.</p> <p>While the Greens and <span class="caps">SPD</span> are widely seen as natural centre-left partners, the fiscally hawkish <span class="caps">FDP</span> have historically been closer to Germany’s conservatives.</p> <p><span class="caps">MERKEL</span> <span class="caps">BIDS</span> <span class="caps">FAREWELL</span></p> <p>Presiding over what could be her final cabinet meeting, Merkel bade her colleagues farewell, and Scholz presented the EU’s longest-serving leader with a tree to plant in her garden, according to a person at the meeting.</p> <p>As finance minister and vice chancellor in the outgoing “grand coalition” of the <span class="caps">SPD</span> and conservatives, Scholz, 63, was seen as a competent rather than a charismatic politician who, like Merkel, has moderate views and is adept at dialogue.</p> <p>The main obstacle in talks were divisions on how to finance the transition towards a green economy and how quickly to move, according to party sources. </p> <p>Such frictions could persist as it is widely expected that <span class="caps">FDP</span> leader Christian Lindner, 42, will take over at the finance ministry and Greens co-leader Robert Habeck, 52, will take on a newly expanded economy and climate change ministry.</p> <p>The <span class="caps">FDP</span> is also expected to put a brake on any formal move towards fiscal union in Europe favoured by the <span class="caps">SPD</span> and the Greens.</p> <p>Merkel did not seek re-election after four terms as chancellor. Her personal popularity ratings remain high, but her party is in disarray and facing a leadership contest after achieving its worst results in a federal vote following a gaffe-prone campaign by its candidate for chancellor.</p> <p>($1 = 0.8919 euros)</p> </div>