German parties agree on initial deal for next govt

BERLIN: German Finance Minister Olaf Scholz on Friday took a step closer to succeeding Angela Merkel as chancellor, as his Social Democrats, the Greens and liberal FDP announced a preliminary deal to form a new government.

The three parties have been holding talks since Scholz’s centre-left Social Democratic Party (SPD) won the general elections on September 26 with Merkel’s conservatives in second place as she prepares to leave politics.

"Overall, we can sense here that a new beginning is possible, brought about by the three parties that have come together here," Scholz told reporters.

"We have agreed on a text from the exploratory talks," he said, calling it a "very good result that clearly shows that a government that aims to ensure we achieve progress can be formed in Germany".

Greens co-leader Annalena Baerbock said the initial agreement heralds a "coalition of progress" to "really use the next decade as a decade of renewal".

The agreement that will form the basis of formal coalition talks all but means that Merkel’s CDU-CSU alliance is headed for the opposition benches after scoring their worst post-war election result.

CDU leader and chancellor hopeful Armin Laschet had recently said his party remains open to forming a governing coalition, but even his own job is hanging on a thread.

Facing their worst crisis in decades, the conservatives are planning a clean sweep of their leadership, with a congress by December to elect their new bosses.

Scholz, who is also Merkel’s vice chancellor, this week voiced confidence that the three-way talks involving his party will produce Germany’s next government before Christmas.

A coalition of SPD, Greens and FDP -- known as "traffic-light" after the three parties’ red, green and yellow colours -- has found favour with Germans, with 62 percent approving the constellation as the next federal government, according to a poll published on Friday.

Scholz’s approval rating was even higher, as three in four said it was "good" for him to become chancellor.

The imminent shift in Germany’s leadership to the centre-left comes as Europe’s biggest economy is grappling with the complex challenge of securing the country’s post-pandemic recovery.

Serious shortages in raw materials and components are already crimping growth, with factories of Germany’s vital automotive industry idled because of the supply issues.

While industry is urging state support to continue, a planned zero-emissions target by 2045 will require huge investments including building more sustainable energy capacity and greener transport options.

Meanwhile, German Chancellor Angela Merkel on Friday said the new pro-EU government taking shape in Germany would be an important message for the rest of Europe.

The outgoing German leader, speaking after three parties announced a preliminary deal to form a new coalition, said the new government "will be one that is pro-European (and) which knows what Europe means for us in terms of peace and freedom".