Schroeder and Merkel’s parties row before talks

By Noah Barkin

BERLIN (Reuters) – Chancellor Gerhard Schroeder’s Social
Democrats (SPD) laid claim on Thursday to being the top party
in Germany’s inconclusive election, sparking a heated row with
Angela Merkel’s conservatives before key coalition talks.

Hours before the rival parties meet for the first time
since the tight vote, SPD chief Franz Muentefering said he
considered Merkel’s Christian Democrats (CDU) and their sister
Christian Social Union (CSU) to be two separate parties.

Current parliamentary rules recognize the CDU and CSU as a
single bloc, but if they were seen as separate the SPD could
claim it won the most votes in Sunday’s cliff-hanger election,
strengthening its bid to keep Schroeder in the Chancellery.

With 35.2 percent of the vote, Merkel’s combined CDU/CSU
came out narrowly ahead of the SPD in Sunday’s vote, but did
not win enough support to form a ruling coalition with its
preferred partner, the liberal Free Democrats (FDP). That has
forced Merkel into coalition talks with Schroeder’s SPD.

“We don’t dispute that unified parliamentary groups can
exist, but it must be clear that coalition talks are conducted
by individual parties,” Muentefering said.

In a statement, he put the SPD’s election score at 34.3
percent, contrasting that with 27.8 percent for the CDU and 7.4
percent for a separate CSU.

“That has consequences,” Muentefering added.

The remarks elicited a fierce response from the CDU, with
leading conservative Wolfgang Schaeuble accusing the SPD of a
“democratic principles deficit.”

The two parties are due to meet at 2:00 p.m. (1200 GMT) and
give statements when the discussions end. Ahead of that
meeting, the CDU/CSU leadership was conducting talks with the
FDP.

Gero Neugebauer, a political scientist at Berlin’s Free
University, said Thursday’s sharp exchanges were typical
pre-talk posturing by the parties, which would have to resolve
seemingly insurmountable differences to form a so-called “grand
coalition” with each other.

“One has to see this latest salvo in the context of the
coalition talks,” Neugebauer said. “The SPD is showing they
have bargaining power and trying to raise the pressure on
Merkel.”

BEST OF BAD OPTIONS

The formation of an alliance between Germany’s two largest
parties is now seen by many experts as the best of several
less-than-desirable options for Germany.

But prospects for a deal have been complicated by
Schroeder’s insistence he remain chancellor and the bitter
animosity between the two camps, aggravated by Schroeder’s
election-night taunting of Merkel on national television.

Merkel had been vowing deep reforms of Germany’s economy,
but her party will probably struggle to push through its
program if it ends up governing with the SPD, which attacked
Merkel during the election campaign as a cold radical bent on
destroying the country’s cherished welfare state.

The deadlock, which must be resolved before October 18 in
order to avert the prospect of new elections, could hinder
European Union-level decisions on reforms needed to boost the
bloc’s economy and re-energize the EU after the rejection of a
planned constitution.

Prolonged political inertia could also damage Germany’s
struggling economy. German growth is now the slowest in the
25-nation EU and unemployment topped the 5-million mark this
year for the first time in the post-war era.

All eyes are now focused on the coalition talks in the
hopes of a rapid deal and the formation of a stable new
government.

“Should coalition-building talks drag, or if the new
government falters because of a fragile or shrinking majority,
this could further unsettle consumers and above all investors
considerably,” Germany’s RWI institute said on Wednesday.