Germany paralysed in leadership wrangle

CHANCELLOR Gerhard Schroeder and opposition leader Angela Merkel held their first face-to-face talks yesterday to wrangle over their rival claims to lead Germany out of political paralysis.

Ms Merkel said her conservative Christian Democrats and Schroeder's Social Democrats agreed to further coalition talks next week but disagreed over who has mandate to run Germany.

Ms Merkel's conservatives narrowly beat Schroeder's party in Sunday's parliamentary balloting and ended his seven-year coalition with the Greens.

But the margin of victory was so slim that Schroeder refused to acknowledge defeat, insisting he should remain as chancellor to manage reforms that so far have failed to fire up Europe's largest economy.

Political leaders said before yesterday's meeting that Schroeder and Ms Merkel would look seriously at joining up in a "grand coalition." But it remained unclear how they would resolve their competing claims to be chancellor, raising speculation that both might have to stand aside or that another election would have to be held.

The pro-business Free Democrat party was Ms Merkel's preferred coalition partner, but their combined parliament total fell short of a majority. Ms Merkel also rejected the possibility of forming a minority government as "not in line with Germany's position as a major country in the world."

With the Greens all but ruling out joining a coalition with Ms Merkel, and the Free Democrats refusing even to talk to Schroeder's party, the Social Democrats and conservatives were under growing pressure to seek common ground for a left-right alliance.

All Germany's established parties ruled out talks with the new Left Party, a grouping of former East German communists and renegade Social Democrats opposed to cuts in the country's creaking welfare programs.