(Bloomberg) -- German Chancellor Angela Merkel’s government struck a deal on a basic pension for long-term earners, a key issue for the Social Democrats that was threatening the stability of the ruling coalition.
The agreement was reached after a meeting of senior officials from Merkel’s conservative CDU/CSU bloc and the SPD at the chancellery in Berlin Sunday, according to a CDU spokesman. He didn’t immediately provide further details. Party chiefs are due to hold a news conference at 4:45 p.m. local time.
Support for both of Germany’s traditional political heavyweights has dwindled since they agreed to end a stalemate after the 2017 election by forming another “grand coalition.”
A proposal for a basic pension for those who have worked at least 35 years was included in their blueprint for government, but Merkel’s bloc balked at the SPD’s opposition to means testing and the medium-term cost estimated in local media at almost 5 billion euros ($5.5 billion).
The next election isn’t scheduled until late 2021 and Merkel has said she won’t run for a fifth term. Her Christian Democrats, and their Bavarian sister-party, the CSU, have yet to choose a candidate to succeed her as chancellor, while Finance Minister Olaf Scholz is attempting to position himself as the SPD’s pick.
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