Germany's SPD offers support to Merkel

The new, leftist leaders of Germany's Social Democrats offered Angela Merkel's struggling coalition a lifeline at a key congress on Friday but vowed to push for more action on climate protection and social equality.

Delegates at the SPD conference in Berlin decisively rejected a motion to immediately quit the coalition, averting a political crisis looming over Merkel's government.

Instead, the majority of the 600 delegates backed a plan by co-leaders Norbert Walter-Borjans and Saskia Esken to open "discussions" with Merkel's CDU/CSU conservatives on demands that will determine the fate of the alliance.

"I am and remain sceptical about the future of this grand coalition," Esken told the conference.

With our list of demands, "we are giving the coalition a chance to continue. Nothing more, nothing less".

Esken and Walter-Borjans, both fiercely critical of the SPD's role as junior coalition partner, were officially confirmed as the first male-female leadership duo in the SPD's 150-year history earlier at the congress.

That they didn't push to bring down the coalition will come as a relief for Merkel, who hopes to stay on as chancellor until her fourth and final term ends in 2021.

But the coalition remains on wobbly ground, with some SPDers preferring a clean break with the Merkel era -- sooner rather than later.

Senior figures from Merkel's CDU and her Bavarian CSU sister party meanwhile have balked at the idea of renegotiating the hard-fought coalition agreement clinched after 2017's inconclusive general elections.

CDU leader Annegret Kramp-Karrenbauer, Merkel's preferred successor, urged the SPD to clarify its position.

"There's much work to be done. That requires a clear commitment to a common task," she tweeted.

Relatively unknown in Germany, former regional finance minister Walter-Borjans and lawmaker Esken were the surprise winners of the SPD's leadership race last month.

Seen as leftists within the SPD, they defeated finance minister Olaf Scholz and his running mate Klara Geywitz in what was interpreted as a rejection of the status quo following a slew of electoral setbacks.

In their warmly received speeches at the Berlin gathering, the pair nicknamed "Eskabo" by German media laid out their vision to revive a party blunted by years of governing in Merkel's shadow.

They are calling for billions of additional euros to be invested in the country's schools and transport infrastructure, in digitalisation and in climate protection projects.

To make that happen, they urged the government to stop clinging to its "black zero" policy of maintaining a balanced budget and not racking up new debts -- risking Scholz's ire.

"If the black zero stands in the way of a better future for our children, then it's wrong and has to go," Walter-Borjans said.

To help close the gap between rich and poor in Europe's powerhouse economy, the new leaders want to raise the minimum wage from nine to 12 euros (USD 13) per hour.

They also want to rethink Germany's Hartz IV unemployment and welfare system -- which was pushed through by former SPD chancellor Gerhard Schroeder but remains hugely controversial in the party.

Accusing the government of not doing enough to tackle climate change, they are in favour of significantly increasing the price for CO2 emissions from the proposed 10 euros per tonne.

"The SPD must be prepared for compromises," said Walter-Borjans. "But they can't blur what we stand for."

Merkel's spokesman has said the veteran chancellor, in power for over 14 years, is "open" to talks.

But if the SPD sees insufficient progress in the weeks ahead, it could still decide to walk away -- potentially triggering snap elections and hastening Merkel's exit.

Observers say voters could well punish the SPD and CDU for sending them back to the polls early, while the far-right AfD and the surging Greens have the most to gain.

Der Spiegel weekly said fresh elections, in which the CDU and Greens are poised to come out on top, could reinvigorate a country wearied by years of Merkel compromises.

"Instead of Merkel's eternal end phase, a fresh start could be possible," it said.