German SPD leader implores party to back coalition talks with Merkel

By Holger Hansen and Paul Carrel

BONN (Reuters) - Social Democrat leader Martin Schulz made an impassioned appeal to his party on Sunday to give the go-ahead for formal coalition talks with Chancellor Angela Merkel's conservatives, a move that would bring Germany a step closer to a stable government.

Schulz is facing a backlash from the Social Democrats' (SPD) left and youth wings, which argue the party should reinvent itself in opposition after scoring its worst election result in September since Germany became a federal republic in 1949.

Speaking in Bonn, where late SPD chancellors Willy Brandt and Helmut Schmidt earned reputations as international statesmen while ruling former West Germany, Schulz implored delegates to allow the SPD to serve as Merkel's junior coalition partner again - a sign of how far the party's fortunes have fallen.

"The SPD must and will be visible, audible and recognizable!" Schulz, sounding hoarse after a week of lobbying delegates, said to loud applause at the packed World Conference Center in the former capital city.

"We ask for your consent to start coalition negotiations."

Around 600 delegates met at the special party congress in Bonn to debate and vote on whether their leaders should push ahead with formal coalition talks on renewing an alliance with Merkel's conservatives that took office in 2013.

The two blocs, which both bled support to the far right in the Sept. 24 election, struck a preliminary deal earlier this month after exploratory talks, but critics, including the party's youth wing leader Kevin Kuehnert, say the blueprint does not bear enough of the SPD's hallmarks.

BLUEPRINT

A copy of the motion on which delegates will vote, seen by Reuters, included language on SPD leaders reaching "concrete, effective improvements" to the blueprint but did not make a final vote on the coalition deal conditional on achieving these.

The envisaged improvements would see concessions on labor, health and migration policies, the motion showed.

"We will fight for further improvements in the coalition negotiations if we can continue the talks," Schulz said.

If a coalition deal is reached, all SPD members still get to vote on the agreement - another hurdle to achieving a new government in Europe's economic powerhouse, which is humming despite the political uncertainty.

Sunday's vote will be watched abroad as Germany has Europe's largest economy and Merkel has long played a leading role in the continent's economic and security affairs.

"Without the SPD, there will be no bold impulses for the future of Europe," said Schulz, 62, a former president of the European Parliament. "It is up to us."

Arriving for Sunday's congress, SPD parliamentary leader Andrea Nahles told Reuters she was "cautiously optimistic".

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A negative vote by the SPD would prolong Germany's political deadlock - already four months old - just as its European partners are looking to Berlin for leadership on European Union reform in light of Britain's decision to leave the bloc.

Possible scenarios in case of an SPD rejection would include a new election or a minority government for what would be the first time in Germany's post-war era.

"This is about the question: coalition negotiations or new elections!" Schulz said in a 57-minute speech. "I do not believe new elections are the right way for us."

Merkel has said she would prefer a new election to leading a minority government.

Leading conservatives have rejected SPD demands for more concessions. Business associations have urged SPD delegates to back coalition talks.