The SPD, Christian Democratic Union (CDU) and the Christian Social Union reached the coalition deal on Wednesday, which will possibly end the new government vacuum since the September 24 federal election, the longest period ever since 1949.
But reneging on his vow not to serve as a minister in a Merkel-led cabinet prompted a wave of criticism from many party members still smarting over his decision to renew the loveless "grand coalition" despite initially pledging to take the SPD into opposition.
Angela Merkel's conservatives and their Social Democrat (SPD) partners faced a chorus of scepticism yesterday as allies and opponents alike criticised a loveless coalition deal that some said showed the German chancellor's time was coming to an end.
Most of the final stretch of talks involved high-stakes bargaining between Merkel and Schulz over Cabinet posts, with Social Democratic demands, including the finance and foreign ministries, according to a CDU official who asked not to be identified. He was then accused of flip-flopping, when he announced on Wednesday that he would cede the party chairmanship to succeed Sigmar Gabriel as foreign minister.
Julian Reichelt, editor-in-chief of the influential Bild daily, called it "the first SPD government led by a CDU chancellor".
Gabriel consoled himself with the words of his daughter: 'Daddy, now you've got more time for us, and that's better than the man with the hairs on his face!' Just two days after announcing that he'd become Foreign Minister, Schulz decided not to take up the post after all, to help preserve party unity.
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Germany has been stuck in political limbo since September's inconclusive general election saw mainstream parties bleed support to the far-right AfD, which tapped into anger over Merkel's liberal refugee policy. The row threatens to overshadow party debate on the coalition deal Berlin policy analysts dubbed solid if unexciting, with a tilt towards social democratic policy and personnel.
Angela Merkel has agreed a deal to form a new coalition government in Germany, four months after suffering damaging losses in elections.
The coalition agreement between the Social Democrats and Merkel's CDU/CSU bloc is still subject to approval from the SPD's around 460,000 members.
The coalition deal must be approved by the Social Democrats' 463,000 rank-and-file members, many of whom bristle at the prospect of enabling yet another star turn for Merkel in Germany and overseas. He was officially elected by a party congress with 100 percent of the vote.
Merkel has relied on exactly this coalition for two of her three four-year terms.