German coalition plans in turmoil

BERLIN - Efforts to forge a German bipartisan coalition were disrupted on Monday when the head of the Social Democrats said he would step down as party leader and might not join a new cabinet after a revolt within his party.

Franz Muentefering made his shock announcement after party leaders voted against his candidate for SPD general secretary, plunging the party into crisis in the midst of talks on forming a power-sharing government with the conservatives.

Traditional rivals, the SPD and conservative Christian Democratic Union/Christian Social Union (CDU/CSU) were forced into coalition talks after an inconclusive election on Sept. 18 left them with no realistic alternative for a stable majority government.

Muentefering had been expected to wield ample power as the SPD's top man in the cabinet as labour minister and vice chancellor.

He has been seen as one of the few SPD leaders capable of forging consensus with the conservatives, led by chancellor-in-waiting Angela Merkel, while keeping his own fractious party united.

Muentefering on Monday vowed to continue with the coalition talks, which are due to be concluded by Nov. 12.

But should he pull out of the new government, it could have far-reaching consequences, possibly prompting top conservatives to question their own participation in the cabinet.

Powerful Bavarian premier and Christian Social Union (CSU) chief Edmund Stoiber was reconsidering his decision to move to Berlin as economy minister, a CSU source told Reuters.

"The SPD is leaderless, it is badly weakened in the coalition talks, and Muentefering's credibility as vice chancellor and spokesman for his party is in question. Because of this, one has to say the coalition talks are endangered," said Juergen Falter, a political scientist at Mainz University.

Falter estimated the chances of a coalition between the conservatives and the SPD at 60 per cent after the Muentefering news, compared to 75 per cent previously.

Leading members of the SPD voted 23-14 to appoint 35-year-old Andrea Nahles, a leading left-wing voice and former head of the SPD's youth wing, as general secretary.

Her election, which Muentefering had publicly opposed, could herald a shift to the left by a party that Chancellor Gerhard Schroeder moved towards the centre during his seven years in power.

Muentefering said after the vote that he would not seek re-election as SPD leader, a position he has held since taking over that job from Schroeder in early 2004.

He said told reporters he wanted to help the party ensure that as many of its policies as possible were implemented by a new government:

"Whether that means that after the party conference I will or can still be in the cabinet, I have expressly left open."

The SPD holds its party congress two weeks from now in Karlsruhe, where it will decide whether to approve a coalition agreement with Merkel's conservatives and set the stage for the first "grand coalition" of the two top parties since the 1960s.

Now it will also have to replace Muentefering as SPD leader, and perhaps find a new vice chancellor.

The two leading candidates for the top party post are Brandenburg premier Matthias Platzeck, 51, and Rhineland-Palatinate premier Kurt Beck, 56.

The conservatives and the SPD need to reach consensus on a range of domestic and foreign issues over the next two weeks.

So far, they have agreed that 35 ($61.02) billion euros must be found by 2007 to plug a hole in the budget and bring Germany back in line with European Union deficit rules.

Now they face the tough task of agreeing where the savings or extra revenues will come from.

- REUTERS