German SPD's new leadership casts doubt over Merkel coalition

Sharp critics of the coalition with Chancellor Angela Merkel's conservatives won a vote for the leadership of Germany's Social Democrats (SPD) on Saturday, raising big questions over the future of the government.

The SPD said leftists Norbert Walter-Borjans and Saskia Esken, who ran on a joint ticket, won 53.06% of the vote by members. They want to renegotiate the coalition deal to focus more on social justice, investment and climate policies.

However, the prospect of a snap election or minority government has increased as Merkel's conservatives may refuse to cooperate even though they would like to stay in power.

The SPD, Germany's oldest party, is in turmoil after a run of dismal regional and European election results and a six-month-long leadership race which has left them trailing in polls.

Many rank-and-file members see their only salvation in quitting government and rebuilding in opposition.

The leftist duo beat Finance Minister Olaf Scholz and Klara Geywitz, who said they would support their rivals after winning just 45.33% of the votes.

The result is a heavy blow for Scholz, the best known candidate. Funke media reported he intended to remain finance minister.

After their surprise victory, Walter-Borjans, a former finance minister in Germany's most populous state of North Rhine-Westphalia and Esken, a lawmaker in the Bundestag lower house of parliament, promised to try to bring the party together again.

Walter-Borjans, who gained a reputation as 'Robin Hood' for cracking down on tax evaders with Swiss bank accounts, stressed that the SPD would not ditch the coalition immediately.

"We have always said this is not just about whether we leave immediately or stay in for the duration," he told Phoenix television, adding he intended to see which policies could be done with Merkel's party and which could not.

The duo have emphasised they want the conservatives to agree to a higher minimum wage and more investment in infrastructure and climate protection - if needed with new debt.

The general secretary of Merkel's Christian Democrats (CDU) said his party wanted to work with the new SPD leaders and that the parties already had a common basis to work on.[S8N2860B9]

A snap election is an unappealing option for the SPD and conservatives, themselves embroiled in a power struggle for the post-Merkel era, as both have lost support since the 2017 election. After 14 years of leading Europe's biggest economy, Merkel has said she will not run again.

It is unclear how far the conservatives will be willing to accommodate the SPD. In the leadership campaign, Esken said that if the conservatives refused to agree to SPD demands, she would recommend that the SPD left the coalition.

SPD delegates are set to approve the leadership at a party conference starting on Dec. 6. They will also vote on the coalition.

The winner faces a mammoth task. In 2017, the SPD's share of the vote slumped to its lowest level since 1933. It is now around 15% in polls, trailing the Greens and conservatives and only just ahead of the far-right Alternative for Germany (AfD).