Macron boosts Merkel ahead of key coalition vote

Sebastian Kurz und Angela Merkel in Berlin

"For now, that means being a dwarf for a while so that we can in the future perhaps be a giant again", Kevin Kuehnert said according to German news site Deutsche Welle.

Before a new government can be established, another vote by the Social Democrats' membership will have to be held on the final coalition agreement. "The Social Democrats would do well not to extend this time in office".

But the narrow nature of the leadership's victory points to lingering divisions in the Social Democratic Party that could yet spell more political uncertainty ahead in Europe's biggest economy.

Finally - a breakthrough in Germany's coalition talks, says Philip Oltermann in The Guardian. And there's no single obvious successor in her own party — potential rivals don't have the strength or, for now, the desire to mount an open challenge.

Merkel, often dubbed the world's most powerful woman, has been hamstrung on the global stage as the domestic drama has played out.

"This feeling of security that she gave people is still there, in large part", said Manfred Guellner, the head of the Forsa polling agency.

New to forex and want to find out more about trading GBPUSD? Voters still respect her, polls show. Her second-term government, a center-right coalition with the Free Democrats, was notorious for infighting that fueled periodic speculation it would collapse.

"Germans love orderly processes, but when it comes to handing over the chancellorship it doesn't happen", said Carsten Nickel at advisory firm Teneo Intelligence.


"We are of course all relieved", SPD leader Martin Schulz told Phoenix television after the vote in Bonn, the capital of former West Germany where late SPD chancellors Willy Brandt and Helmut Schmidt earned reputations as global statesmen.

Merkel's decision in 2015 to allow in large numbers of asylum-seekers caused major political friction and boosted the nationalist Alternative for Germany party, which past year became the third-largest in parliament after campaigning on a shrill anti-migration and anti-Merkel message.

The 28-year old leader of the Social Democratic Party's (SPD) youth wing, the Jusos, strongly opposes the idea of a new coalition between the two major German parties, the CDU and SPD, and is ready to take decisive steps to prevent such a scenario.

While endorsement seems likely, the proposal is so fiercely opposed by the SPD's youth wing and the party's members on the left that a No vote can not be ruled out, a scenario that would trigger another election or force Ms. Merkel into a lame-duck minority government.

It's almost four months since Germany's federal election, in which leaving Merkel with a mathematical and ideological quandary in her effort to form a new government. "Merkel and Schulz will govern but won't inspire", Josef Janning, senior policy fellow at the European Council on Foreign Relations, said this week in a note.

Germany's had this government for the last four years. The Munich-based Ifo Institute for Economic Research recently published a report that claims gross domestic product is set to grow by 2.6 percent this year, and while business morale dipped slightly last month, it still is close to a record high.

The parliaments of Germany and France called for the agreement to be upgraded and renewed.

It remains to be seen when that will be. In 1998 she was quoted as saying: "I don't want to be a half-dead wreck when I leave politics".

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