Angela Merkel's party, others strike coalition deal

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It was reported in German media on Friday that Angela Merkel's Christian Democrats and former coalition partners the Social Democrats had discussed their differences over tax and migration.

The pop came after reports Chancellor Angela Merkel's conservative CDU party and Martin Schulz's center-left SPD after all-night talks agreed to a blueprint for formal coalition negotiations.

It paves the way to formal coalition negotiations that will end government vacuum lasting for over three months since September 24 federal elections, and the new policies will be a strong boost to European Union after the Brexit.

"The mood of the party rank and file with regards to a grand coalition is still grim".

SPD delegates will have their say on the preliminary coalition deal at an extraordinary party conference on January 21st. The problem is that the announced budget for the implementation of government policies amounts to 45 billion euros ($54.2 billion) and the proposals by the parties are two times as large as the budget.

However, the parties managed to reach an agreement on yearly limits for refugee arrivals in Germany, according to the DPA news agency, defining the desired limit on the number of refugees coming to Germany stays within the range of 180,000-220,000 per year.

The SPD made compromise in supporting refugees' family reunion.

"I think we achieved an excellent result", Schulz said.

The consensual document constitutes skeleton of government programme of future German executive.

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The document stipulates that the European Union must play a leading worldwide role in climate protection and advocate an ambitious implementation of the Paris Climate Change Agreement.

The announcement is a huge success for French president Emmanuel Macron, who proposed the sweeping European Union reforms, including the creation of a Euro finance minister.

Strengthening the Franco-German relationship will be good. Frank Baasner, director of Ludwigsburg-based think-tank German-French Institute, told Xinhua.

Going into the final round of "exploratory talks" between the parties, Merkel appeared upbeat but admitted that there were still "major obstacles" to overcome.

Macron said he and Kurz, a conservative who formed a government with the far right in December, had found many "points of convergence" during their talks in Paris.

In fact the political talks were tripped up by the country's strong finances, as parties had opposing views on how to manage the cash. Berlin's partners are awaiting a new government to help propel Brexit talks, euro zone reform and European Union diplomatic initiatives.

European Commission President Jean-Claude Juncker called it a "significant, positive, forward-looking contribution" to the European policy debate.

Although Merkel is being criticized in Germany because is takes her such a long time to form a new government, the German chancellor is clearly willing to make concessions to the SPD.

As Germany struggled to emerge from a 4th month of political paralysis, its economic health stood in stark contrast. This has placed her government in jeopardy and she is now reaching out to the SPD party as a last resort. The sides then need to hash out the actual coalition agreement, which would have to be approved in a ballot of the Social Democrats' entire membership.

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