Merkel faces make-or-break week in talks to form government

(Bloomberg) German Chancellor Angela Merkel enters the final stretch of preliminary talks to form a new government on Monday as factions in the complex multi-party negotiations remain far apart on issues including migration, climate and European policy.

Entering a fifth week of negotiations between Merkel’s Christian Democrats, her Bavarian CSU sister party, the pro-market Free Democrats and the environmental Greens, the parties face a self-imposed deadline of Thursday to wrap the exploratory talks. The Greens over the weekend warned the talks could collapse.

"Something has to move within the negotiating groups in the remaining days -- only then can we do this," Green co-leader Katrin Goering-Eckardt told Sueddeutsche Zeitung newspaper. Juergen Trittin, the veteran former Green environment minister, told Tagesspiegel that "not a single point from our 10-point plan has been implemented -- for the Greens, the score is zero-to-10."

Merkel has maintained a low profile after emerging victorious but weakened in the September 24 election, focusing on forging a four-way coalition that’s had no precedent in the 68-year history of the federal republic. Although talks have made progress on education spending and digital expansion, the parties have struggled to find a common line on Germany’s refugee crisis and the country’s climate goals.

Party leaders on Sunday met to set the agenda for the week. Officials aim to establish a written preliminary agreement, which the Greens plan to put to a party conference vote on November 25. That’s viewed as the main obstacle before the groups reconvene for official coalition talks, during which they’ll draw a blueprint for the next four years.

Without precedent

The Social Democrats, who suffered their worst electoral defeat since World War II, have vowed not to form a coalition with Merkel’s bloc. Should the multi-party talks fail, that leaves open the option of a minority government -- also without precedent in postwar history -- or new elections, a risky prospect given the rise of the far-right Alternative for Germany, which won 12.6% in September.

The Greens last week softened their demand for a phaseout of CO2-producing coal and an end to the sale of new combustion engines by 2030. But they’ve demanded a concrete plan for Germany to achieve its now-ambitious CO2 reduction goals as well as its commitments as part of the global Paris accord.

Merkel over the weekend said in a video podcast that achieving climate goals was crucial, but mustn’t endanger German industry and jobs.

The Free Democrats, meanwhile, backed off the party’s demand to phase out the European bailout fund. But the party has stepped up calls for tax cuts, particularly by phasing out within this legislative period the so-called solidarity charge, designed to help fund infrastructure in the formerly communist east.

The most difficult stumbling block may be migration, two years since more than a million asylum seekers made their way into Germany. Merkel’s bloc has insisted on limits to migration and speedier deportations for rejected asylum seekers. The Greens have insisted on refugees’ rights to family reunions and rejected expanding a list of safe-origin countries to Maghreb states in northern Africa.