Chancellor Angela Merkel faced criticism from within the ranks of her own conservatives yesterday for making concessions to her center-left Social Democrat (SPD) coalition partners to seal a governing alliance a day earlier.
Merkel, who leads the Christian Democrats (CDU), ceded the powerful finance ministry to the SPD in a coalition deal finally agreed on Wednesday, more than four months after a national election last September in which both blocs lost support.
"I think the cabinet formation, as it is now, is a political mistake," said Christian von Stetten, a CDU lawmaker who represents business interests, told broadcaster ARD, adding that this applied in particular to giving up the finance portfolio, according to Reuters.
Handing over the finance ministry shows the high price the conservatives had to pay to renew the 'grand coalition' with the SPD that has governed Germany since 2013, and secure Merkel's fourth term in office. Mass-selling daily Bild said Merkel had sold out.
"Chancellor at any price," Bild wrote on its front page. "Merkel gifts the SPD the government."
Under the coalition agreement, the SPD will retain control of the foreign, justice and labor ministries among others. Merkel ally Julia Kloeckner was forced to defend the coalition agreement.
"We have kept our key promises from the election campaign," she told broadcaster Bayerischer Rundfunk. "For families, there is significantly more support. We will keep the finances stable. There will be no new debts, but also no tax increases."
Merkel's fate now lies in the hands of the SPD, as Schulz has promised to give his party's 460,000 members the final say on whether to accept the coalition pact. Observers expect the referendum to be tight, with the SPD's left and youth wings fiercely opposed to another four years governing in Merkel's shadow. The yes-or-no referendum will be held by postal ballot, with the result expected to be announced around March 4. A green light could see a new Merkel-led government in place by the end of next month.
According to the coalition deal, the parties agreed to support Macron's reform drive and tentatively backed his idea of a eurozone investment budget. On the hot-button topic of migration, the two camps said they would aim to limit the annual intake to 180,000-220,000 people, a key CSU demand. The SPD won assurances that family reunifications for refugees would resume in August, restricted to 1,000 people a month.
An SPD push to overhaul the two-tier health care system also yielded results, with a new commission set to examine leveling out doctor pay under statutory and private insurance schemes. But the protracted haggling has left its scars, and surveys suggest the two camps could lose their majority if a "no" vote from SPD members sends the country back to the polling booths.