By Madeline Chambers and Matthias Williams
BERLIN (Reuters) – The Social Democrats (SPD) of Germany announced on Wednesday that they have agreed to engage in discussions regarding a potential coalition with Friedrich Merz’s conservative faction. However, they emphasized that their support is not guaranteed and criticized Merz’s negotiation approach.
The SPD convened to appoint Lars Klingbeil as the new parliamentary party leader following a significant defeat in the recent election, following the collapse of Chancellor Olaf Scholz’s unpopular SPD-led coalition last November.
Observers are monitoring the demands that the SPD will make in exchange for joining a government, including the establishment of a substantial new defense fund and reforms to borrowing limits known as the “debt brake.” Analysts and investors are eager for a swift relaxation of the debt brake to stimulate Europe’s largest economy and finance necessary upgrades to Germany’s military, particularly in light of shifting global dynamics involving the U.S., Russia, and the Ukraine conflict.
Given the parliamentary arithmetic, the center-left SPD is viewed as the most probable partner for Merz’s conservatives in forming a new governing coalition in Berlin. However, there is lingering tension between the two parties following a contentious election campaign.
Klingbeil expressed the SPD’s eagerness for prompt discussions and establishing a negotiation timetable on various issues encompassing security, employment, and social welfare. He underscored that the responsibility now rests with Merz to ensure that these discussions yield tangible results.
The SPD has expressed reservations about Merz’s potential endorsement of increased defense spending through a special fund, especially after hesitating on this matter while in the opposition. Additionally, they accused the conservatives of discussing sensitive subjects in a public forum.
“We are committed to bolstering the Bundeswehr (military) and increasing investments in our country,” Klingbeil stated. The SPD is open to exploring the feasibility of these measures in the current parliamentary session. However, Klingbeil emphasized the necessity of private and serious negotiations rather than public posturing.
Merz extended congratulations to Klingbeil following his election, expressing optimism about their collaboration in the upcoming legislative term. He underscored the pivotal role that the parliamentary center plays in this process.
Merz’s less-than-stellar election outcome, with only 28.5% of the vote, places him in a challenging position with a potentially obstructive parliament due to the rise of far-right and far-left parties.
Some lawmakers are advocating for a vote to relax the debt brake or approve the defense fund, or both, in the current parliament. Nonetheless, Merz has dismissed the possibility of a swift alteration to the debt brake and expressed challenges in reaching a consensus on a defense fund with a significant financial value.
The reform of the debt brake and the establishment of the defense fund necessitate two-thirds support in parliament, a scenario that may depend on the realignment of smaller parties once the newly elected lawmakers take office by March 25.
These initiatives reflect
Ebt brake while only 28% are against. Among conservative voters, 56% support loosening it. Reporting by Madeline Chambers, Andreas Rinke and Matthias Williams; writing by Matthias Williams; editing by Mark Heinrich.
