GroKo agreement and fault lines

The grand coalition (GroKo) talks enter their fourth day amidst a social media blackout.

The talks between Merkel’s CDU, the CDU’s ally the CSU, and the SPD have so far progressed smoothly, albeit with some signs of strain.

Agreements so far in GroKo talks

It’s reported that agreements have been made on:

  • Controlled immigration of workers with priority given to those with specialist skills
  • Climate change goal of reducing carbon dioxide emissions by 40{3960e34902b17726ab2e917772ce8f42036738fd515a86e63f9152ec8ca0006d} by 2020 dropped
  • Top rate of income tax of 42{3960e34902b17726ab2e917772ce8f42036738fd515a86e63f9152ec8ca0006d} lifted on earnings from €53,700 to €60,000

Up to now the talks have been cordial but tomorrow, as fault line issues are discussed, the mood may change.

Thursday is fault line day

Tomorrow’s negotiations include Europe, social affairs, health, and labour market reform.

All these pit Merkel’s CDU and CSU allies against the SPD. The SPD leadership faces the additional pressure of discontent amongst their rank and file.

Kevin Kühnert, the leader of the SPD’s youth organization (Juso), voiced their opposition to GroKo. Kühnert declared, “…we can still prevent the grand coalition”.

Agreement the more likely outcome…

All the parties in the talks are under enormous pressure from the political and economic establishment for an agreement.

That means that while a GroKo agreement is the more likely outcome, ‘fault line day’ could spring an unwelcome surprise…

Gary Hollands

Geopolitical analyst Tyga FX