German Chancellor Angela Merkel and SPD leader Martin Schulz finalized a "Grand Coalition" Deal this morning.

Resurrecting the “grand coalition,” the SPD will take control of the foreign, finance, and labor and social affairs ministries, while the CDU will have the ministry of economic affairs and the ministry of defense, according to BILD.

Around 450,000 SPD members still have to agree to the deal, a process expected to take around three weeks. Only after ratification will the new federal government formally come into effect.

Now, the Hard Part

That Merkel and Schulz would agree was a near given once the talks started. After all, both are fighting for their political lives.

That it took this long to reach a deal was problematic. And opposition to the deal is mounting.

Eurointelligence Comments


Yesterday was the last day on which non-members could join the SPD and be eligible to vote in the referendum. Since the beginning of the year, the party has gained over 24,000 new members, about 5% of its previous membership. We cannot be entirely sure, but it appears to us that the vast majority - we think over 90% of those - have joined the party to vote against the grand coalition. We always thought that, if the party were to approve the grand coalition agreement, the vote would be close. In that context, 5% here or there is not a trivial number. In the Brexit referendum, it would have swung the vote in the other direction. 

Nothing Grand This Time

Even if the rank and file approve the referendum, there is nothing "grand" about this coalition. Recent polls show there is less than 50% combined support for SPD and CDU/CSU.

The compromises it took to reach this deal displeased rank and file in both parties. Both Merkel and Schulz will likely be ousted if this referendum fails.

It remains to be seen is that is a plus or a minus for the referendum approval.

Mike "Mish" Shedlock

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