Schroeder, Merkel meet to settle leadership
(Reuters)
Updated: 2005-10-06 13:48

German Chancellor Gerhard Schroeder and conservative leader Angela Merkel meet on Thursday to thrash out who will lead the country after last month's inconclusive general election.

Merkel's conservatives and Schroeder's Social Democrats are warming to the idea of forging a coalition after neither was able to form a government with their preferred allies, but the issue of who should be chancellor has divided the fierce election rivals.

A combination of two pictures shows Angela Merkel (R), leader of Germany's conservative Christian Democratic Union (CDU) and German Chancellor Gerhard Schroeder as they address the media following the third round of talks in Berlin October 5, 2005.[Reuters]

Christian Democrat (CDU) chief Merkel, her Bavarian ally Edmund Stoiber, head of the Christian Social Union, Schroeder and Social Democrat (SPD) chairman Franz Muentefering will seek to settle the issue at a meeting from 7 p.m. (1700 GMT).

There are signs Schroeder, 61, could be prepared to give up the job he has held since 1998. Merkel, who grew up in East Germany, would be the country's first woman chancellor.

Schroeder said earlier this week he would not stand in the way of the creation of a stable government.

Germany's top-selling Bild newspaper, which is broadly supportive of the center-right, said Merkel was likely to become chancellor if she held her nerve.

"Does he (Schroeder) see that the poker match has come to an end?" it asked in its Thursday edition.

"Schroeder will not make it as the SPD's minority chancellor as long as the majority chancellor (Merkel) doesn't allow herself to be hustled out."

GRAND COALITION

The tone of recent comments suggests Germany's top parties may be close to ending a deadlock that has plagued the country for two-and-a-half weeks.

Once Europe's economic powerhouse, Germany now faces weak growth, high unemployment and a stubborn budget deficit.

Protracted talks and conflicts between the CDU and SPD over how to solve Germany's woes risk exacerbating these problems.

A so-called "grand coalition" between the main parties on the left and right has only existed once before in Germany, back in the 1960s.

Business expressed horror at the prospect of a grand coalition before the September 18 election, but is now welcoming the possibility of a stable alliance tackling Germany's budgetary woes and reforming the federal system.

German share prices climbed to 3-1/2 year highs this week on hopes of an agreement.

The European Union's top economic policy official told the Financial Times Deutschland (FTD) newspaper that a grand coalition would be best positioned to cut the nation's budget deficit.

"I believe a grand coalition will be better placed than other formations," European Monetary Affairs Commissioner Joaquin Almunia said in comments to appear in the Thursday edition of the newspaper.

Merkel and Schroeder both sounded upbeat on Wednesday about the prospect of agreeing a power-sharing deal.

"Overall, I am more optimistic than pessimistic," Merkel told reporters after a third round of exploratory talks.

The conservatives say their four-seat advantage over the SPD means Merkel should become chancellor. The SPD argues Schroeder should stay in office as he is favored in opinion polls and since parties on the left as a whole have more seats in parliament.

Close

Building blast kills one, injures 3 in Istanbul Bali bombings kill 25, 100 injured US millionaire ready for space trip

Today's Top News     Top World News
Beijing targets a harmonious society in Five-Year Plan         Second manned space flight set on Oct 13         US to review textile petitions on China         Australia, mediator between US and China?         China sees 2005 trade surplus over $90bln         CCB plans up to US$7.64b in IP0 - sources	Saddam's October trial may be delayed       Australia, mediator between US and China?       White House spy stole classified documents       Bush: US to stay on offense in Iraq       Ramadan bomber kills 26 at Shi'ite mosque in Iraq       Hurricane Stan kills 133 in Mexico, Central America