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Merkel, Schulz reach deal for German coalition

Merkel, Schulz reach deal for German coalition

Gentiloni "has had contact" with Germany's Chancellor Angela Merkel and with center-left SDP party leader Martin Schulz after their breakthrough on talks to form a new coalition government, sources from Gentiloni's office said on Friday.

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 development will come as a relief for Merkel's conservative Christian Democratic Union / Christian Social Union alliance, which remains the country's largest party but was left weakened following a disastrous showing in September elections.

Politicians stayed up all night to discuss the 28-page document, with the talks lasting more than 24 hours.

"The SPD got its way in many areas", senior SPD lawmaker Hubertus Heil told public broadcaster RBB in what is likely to be the first of many such entreaties to rank-and-file members in the coming week. "I think we produced excellent results".

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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.

Merkel initially attempted to form a coalition with two smaller parties.

The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election.

But both parties bled support in the September 24 election, which saw the far-right Alternative for Germany (AfD) enter the Bundestag lower house of parliament for the first time.

In their joint blueprint, the parties agreed on key policy outlines - to join European Union partner France in a push to "strengthen and reform" the eurozone, to limit the influx of asylum seekers to Germany to around 200,000 a year, and to refrain from tax hikes given the healthy state of public coffers. And there will be a limit of 1,000 per month on the number of close relatives allowed to join migrants in Germany who are granted a status short of full asylum.

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The Social Democrats reportedly received commitments for hiring more care workers and increasing salaries in the sector, and for no cuts to the minimum pension level until at least 2025.

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.

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.

Four months on, Germany has given a guarded nod of agreement to euro zone reform proposals from French president Emmanuel Macron.

On some polling, around half of SPD supporters oppose a new grand coalition. The SPD leader plans to tour local party chapters next week to sell the deal, while the SPD's youth organization plans protest rallies to lobby against it.

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