Newspaper Bild reported that the breakthrough was reached after Merkel’s conservatives ceded to SPD leader Martin Schulz’s call to equalise health-insurance contributions made by employers and employees.
Under Germany’s multi-payer healthcare system, employers and employees used to contribute an equal amount towards each individual’s statutory “sickness fund”, but since a reform to the system in 2005 insurants have increasingly had to shoulder additional payments on their own.
SPD delegates will now vote on whether to move talks to the next stage at a party conference on 21 January. Even then, the Social Democrats’ leaders will still have to sell the coalition to their membership, and face much resistance.
If talks fail Merkel’s only options remaining will be to form a minority government or hold new elections.
The Social Democrats had initially ruled out another coalition with Merkel after poor results in the 24 September election, but reconsidered after her talks with two other parties failed.
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