Germany's top parties reach coalition deal after long talks

European Stocks Rebound on German Hopes for Coalition Government, Positive Earnings

German Chancellor Praises Deal to Form Coalition Government with Social Democrats

Angela Merkel's conservatives and their Social Democrat (SPD) partners faced a chorus of scepticism yesterday as allies and opponents alike criticised a loveless coalition deal that some said showed the German chancellor's time was coming to an end.

The decision by Mr Schulz was made as he came under intense pressure from his Social Democratic Party (SPD) to give up the role.

And in Berlin they demanded that Germany return to the European Union leadership position. The paper cited Friedrich Merz, a former CDU rival whom Merkel sidelined after becoming party chairwoman in 2000, as saying the coalition deal was a "humiliation" for the Christian Democrats.

The SPD has managed to secure the finance, foreign and labour ministries as part of the deal, "a significant feat for the leader, Martin Schulz", who is set to land the job of foreign minister, says The Guardian.

The disarray within the party risks upending a ballot by the SPD's more than 460,000 members on whether to approve the coalition agreement, which would open the way for Merkel to be sworn in as chancellor more than four months after the election.

Having the 47-year-old Nahles literally grab power of Germany's oldest political party adds a new wild card to Berlin's political poker - and speculation about Merkel's political future.

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The foreign ministry is now held by Sigmar Gabriel, who handed the Social Democrats' leadership to Schulz a year ago and has become one of Germany's most popular politicians.

The perception among SPD activists that Schulz had constructed a life raft from the wreckage of an election disaster led many analysts to predict that the party's rank and file membership would not authorise the coalition deal sealed just two days ago.

The coalition deal must be approved by the Social Democrats' 463,000 rank-and-file members, many of whom bristle at the prospect of enabling yet another star turn for Merkel in Germany and overseas.

At the foreign ministry Schulz will direct Germany's European Union policy with the support of Olaf Scholz, a party colleague, at the finance ministry. In addition to the controversy over Schulz, Merkel herself has been under fire for giving key ministries to the SPD to extend her 12-year reign over Europe's biggest economy.

The move defuses a crisis that was threatening to rip the SPD apart ahead of a vote on whether to approve the coalition agreement that was clinched by the party this week with the conservative CDU/CSU bloc.

Merkel has relied on exactly this coalition for two of her three four-year terms.

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