In a breakthrough, German Chancellor Angela Merkel's Christian Democratic Union and its main rival - the centre-left Social Democratic Party - today reached a deal on a package of policies to form a new coalition government, winding up 5 weeks of tough negotiations.
After 17 hours long tense round of talks, the CDU, its Bavarian sister party, the Christian Social Union (CSU), and the SPD reached a compromise on issues which blocked an agreement on the formation of a new government.
The new coalition between the two largest parties will be the third in Germany's post World War II history and the second under Chancellor Merkel's leadership. She headed a similar coalition during her first term between 2005 and 2009.
The parties agreed to SPD's demand for a minimum wage of 8.50 euros per hour for all sectors from January 1, 2014. This was one of the key term of the SPD to join a new coalition with the two conservative parties.
The two sides reached a compromise on the CSU's demands to levy a highway toll on foreign-owned cars using the Autobahns across the country. They agreed that it will be similar to the highway toll already charged in Austria and in Switzerland and it will be introduced by passing a legislation next year.
The parties also endorsed the CDU's proposals to reform the national pension scheme.
The new government, which is expected to take office before Christmas, will allow for the first time dual nationality for persons of foreign origin born in the country.
In an effort to speed up the transition from nuclear to renewable energy, the parties agreed to increase the share of renewable energy in the electricity supply from 55 to 60 per cent till 2030. It is a compromise between 50 to 55 per cent share proposed by the conservative bloc and 75 per cent demanded by the SPD.
The leaders of the three parties focused the final phase of their discussions to sort out their differences over the financing of these and other projects of the new government during the next four years.
The agreed that there will be no tax hike for this purpose and the new government will take no new debts from 2015. Some estimates suggested that the new coalition will require around 23 billion euros to finance its projects and it can raise only around 15 billion euros without increasing taxes or taking new credits.
Chancellor Merkel will present details of the coalition agreement together with SPD chairman Sigmar Gabriel and CSU leader Horst Seehofer at a news conference later on Wednesday.
Leaders of the three parties expressed satisfaction over the agreement reached. It is worth recommending to the SPD's members for their approval, the party's general secretary Andrea Nahles told journalists at the conclusion of the negotiations.
Signing of the coalition agreement by the coalition partners will be delayed until the SPD's 475,000 members approved it in a mail ballot, which is expected to be completed by December 17.
