German Lawmakers Reach Breakthrough in Talks to Form a New Government

Coalition party leaders in Germany have reached a breakthrough in talks to form a new government, according to multiple reports.

Germany's Chancellor Angela Merkel entered into talks with a rival party earlier this week in a last-ditch effort to form a coalition government. This after months of political uncertainty and deadlock in the euro zone's largest economy.

After 24 hours of grueling discussions — that reportedly ran all through the night — a new blueprint for more formal coalition talks was presented to party members on Friday morning. At best, a government will still not be sworn in by late March or early April, according to some experts.

Merkel, the head of a conservative alliance made up of the Christian Democratic Union (CDU) and its Bavarian sister-party the Christian Social Union (CSU), met with Martin Schulz, the head of the Social Democratic Party (SPD), for the preliminary talks.

The SPD had previously refused to enter into another coalition government given that its voters punished it in the last election for its previous alliance. But after coalition talks between Merkel and two other parties failed to find an agreement, the SPD changed its stance.

The blueprint

The blueprint for the next round of talks features a range of points, according to Reuters who cited sources close to the negotiations. There will be no new tax rises, according to the document, and both parties are committed to strengthening the euro zone in close partnership with France. Both parties also reportedly want to transform a rescue fund that was used during the euro zone sovereign debt crises and are prepared to boost Germany's contributions to the EU.

Merkel sounded optimistic ahead of the talks, commenting last Sunday that she...