Germany: Merkel ready for "painful compromises"

German Chancellor Angela Merkel said she was ready to make “painful compromises” to clinch a coalition deal with the Social Democrats (SPD), whose leader said Tuesday was “decision day” for negotiators after months of political uncertainty. 

Reportedly, Germany could face a new election or an unprecedented minority government if SPD members reject a coalition deal. But negotiators from both blocs said they must reach agreement on Tuesday. Andreas Scheuer, secretary-general of Merkel’s party, said there was no possibility of extending the talks; both blocs agreed they needed more time to reach a deal on renewing their “grand coalition” and decided to resume talks at the headquarters of Merkel’s party on Tuesday.

Merkel’s failure to cobble together a government more than four months after a national election has raised concerns among investors and partner countries at a time when Europe is facing multiple challenges - including the need for euro zone reform and Britain’s departure from the EU.

Germany has been governed by a caretaker government since the Sept. 24 election returned no clear outcome.