Merkel’s Christian Democratic Union and Schulz’s Social Democrats had been locked in talks since early January. Angela Merkel’s Christian Democratic Union has agreed on the terms of a coalition deal with the centre-left Social Democrats following marathon talks in Berlin, German media has reported.
In what would amount to a significant feat for its leader, Martin Schulz, the news outlet Spiegel said the Social Democratic party (SPD) had managed to secure the finance, foreign and labour ministries.
A boosted interior ministry with an additional focus on life in regional areas has reportedly been handed to Horst Seehofer of the CSU, the Christian Democrats’ sister party.
As well as staying in charge of Merkel’s chancellery, the Christian Democrats are said to have claimed the ministries for economy and defence.
The CDU and the SPD have been locked in coalition talks since the first week of January following the collapse of Merkel’s attempt to form an unorthodox “Jamaica” coalition with the pro-business Free Democrats and the Green party.
The two parties missed several deadlines they had set themselves after a deadlock over employment law and SPD-proposed reforms to Germany’s multi-payer health service.
With the talks running into Wednesday morning, the German chancellor had to postpone an official lunchtime meeting with Italy’s prime minister Paolo Gentiloni until the early evening.
Once the two parties have officially presented their coalition agreement, the Social Democrats will allow its 460,000 members a vote on whether the party should formally enter a governing coalition with Merkel’s party.
Schulz, whose party has played junior partner to Merkel in the German government for the past four years, initially ruled out the possibility of another grand coalition under his leadership after September’s elections.
The SPD’s leadership faces opposition from groups including its own youth wing, the Young Socialists, who believe it should reinvent itself in opposition rather than seek another term in government.
Only SPD members who joined the party before 6pm on Tuesday will be able to cast a vote in the ballot. At a special party summit in January, only a narrow majority of SPD delegates voted in favour of continuing coalition talks.
A repeat of the grand coalition between the two largest parties will see the far-right Alternative für Deutschland, the third largest party in the Bundestag, become the official opposition.
Migration emerged as a contentious political issue in Germany following the refugee crisis, when 1.2 million migrants entered the country in 2015-16. The backlash against Merkel’s decision to keep open Germany’s borders resulted in a far-right party entering the German parliament for the first time in more than 50 years.