Merkel reveals the wurst-fuelled coalition deal that may save her job

Merkel party a step closer to new coalition government

The CDU and the SPD began talks on a grand coalition after negotiations for a so-called Jamaica coalition, between the CDU, the Free Democrats, and the Green Party, collapsed previous year.

About 500 refugees, majority from Syria, Afghanistan, Iraq and Eritrea, live in container homes at refugee housing Am Aschenland in Neugraben, in the outskirts of Hamburg, northern Germany.

A 28-page coalition paper, presented by Merkel as a "give-and-take" compromise, suggests family-reunification arrivals should be capped at 1,000 a month, and overall immigration be capped at between 180,000 and 220,000.

If things go well, a new government could be formed by Easter, said Horst Seehofer, the leader of the Christian Social Union - the Bavaria-only sister party to Merkel's Christian Democratic Union.

SPD delegates will vote on whether to move talks to the next stage at a party conference on 21 January.

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Mr Schulz described the talks as "long, tough, exciting and turbulent", adding: "I think we achieved an excellent result".

France said it too welcomed the deal struck between the German Chancellor and Social Democrat (SPD) rivals to open power-sharing talks and revive a "grand coalition".

The SPD party base had to be mobilized, Bülow said, to "stop this grand coalition from within Social Democrats". He didn't secure an increase in the top income tax rate that his party proposed.

The parties agreed to spend more on the European Union - a long way short of Schulz's ambition to create a "United States of Europe" by 2025.

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The parties pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax. According to the German media, the three parties agreed not to raise taxes if they form a governing alliance, and to increase Germany's input to the European Union budget. He also supports the creation of a finance minister and stand-alone parliament for the eurozone - ideas that are viewed with scepticism in Germany and did not appear in the coalition document.

Merkel now leads a caretaker government, limiting her ability to take major policy initiatives as French President Emmanuel Macron pushes an ambitious European reform agenda.

"It was clear to us from the beginning that it wouldn't be easy to carry out these exploratory talks", Social Democratic leader Martin Schulz told reporters in Berlin on Friday.

" close partnership with France, we want to sustainably strengthen and reform the Eurozone so that the euro can better withstand global crises", the paper reads.

European Commission president Jean-Claude Juncker said the German deal was "significant" and "positive" for the EU's future. "That is why we want to further strengthen and renew German-French cooperation".

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But as hopelessness in the early hours of Friday gave way to cautious optimism in the morning, the steepness of the climb ahead remained evident: All three leaders must now secure the support of their party hierarchies. Another lawmaker, Frank Schwabe, described the deal on migrant's relatives as "shabby".

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