German Chancellor Angela Merkel said she was ready to make painful compromises to clinch a coalition deal with the Social Democrats (SPD), whose leader said Tuesday was “decision day” for negotiators after months of political uncertainty. Both blocs agreed late on Monday they needed more time to reach a deal on renewing their “grand coalition” and decided to resume talks at the headquarters of Merkel’s party on Tuesday. “Each of us will have to make painful compromises and I am ready for that,” Merkel told reporters. “When we see the movements on the stock markets over the last hours, we live in turbulent times and what is expected of us as popular parties … is that we form a government for the good of the people, one that brings stability,” she said.
Merkel’s failure to cobble together a government more than four months after the election has raised concerns among investors and partner countries at a time when Europe is facing multiple challenges – including the need for euro zone reform and Britain’s departure from the EU.
Germany could face a new election or an unprecedented minority government if SPD members reject a coalition deal. But negotiators from both blocs said they must reach agreement on Tuesday.