UPDATE 3-Hoping to win backing for German coalition, SPD boss drops foreign minister plan

minister plan@

* SPD leader hopes to end personnel debates with his move

* SPD youth wing lobbying for members to veto deal

* Conservative youth leader: Need to consider Merkel successor

* Anger among conservatives over giving SPD Finance Ministry (Adds SPD youth leader, discontent in conservative ranks)

BERLIN, Feb 9 (Reuters) - The leader of Germany's Social Democrats (SPD), Martin Schulz, gave up plans on Friday to become the country's next foreign minister, hoping to shore up support among his party's members for a new 'grand coalition' with Angela Merkel's conservatives.

The SPD agreed on Wednesday to form a new government with the conservatives, more than four months after Germany's election, but the SPD's 464,000 members could still scupper the deal in a ballot whose results will be announced on March 4.

Many grassroots members of the centre-left party are sceptical about another tie-up with the conservatives after serving in a similar coalition in 2013-17. The SPD then suffered its worst result of the postwar era in September's election.

Schulz's announcement on Wednesday that he would resign as SPD chairman to become foreign minister prompted strong criticism in the party as he had promised before the September election that he would not serve in a Merkel-led government.

Merkel, who will secure a fourth term as chancellor if the coalition deal holds, has also come under fire from some in her own camp who say she has made too many concessions to the SPD, including handing it control of the powerful finance ministry.

The chancellor is desperate to get a government in place and end the months of political limbo that have hampered decision-making in Germany, Europe's largest economy, and caused concern among its partners in the European Union, which faces challenges from eurozone reform to Brexit.

Schulz, who originally strongly opposed another tie-up with the conservatives only to become one of its leading advocates, has lost political credibility but hopes his decision to step aside will now encourage SPD members to back the coalition deal.

A Forsa poll had shown almost three-quarters of Germans thought it would be wrong for Schulz to become foreign minister.

"I sincerely hope that this (decision) will end the personnel debates within the SPD," Schulz, a former president of the European Parliament, said in a statement.


Schulz will also step down as party leader, and his likely successor, Andrea Nahles, said the party would now focus on policy content ahead of the ballot.

Kevin Kuehnert, the leader of the SPD's youth wing, had strongly criticised the focus on staffing over policy in recent days and said some of the top brass needed "to put their ego on the back burner" so members due to vote on the coalition could focus on evaluating the content of the agreement instead.

Kuehnert, 28, is travelling around the country urging members to vote against a 'grand coalition'. He told broadcaster SWR he expected a minority government to take charge in Germany, at least for a few months, if SPD members heeded his call.

The SPD and the conservative bloc both need to respect the clear message delivered by voters, Kuehnert said. Merkel's conservatives also lost support in the September election which saw a far-right party enter parliament for the first time.

Discontent also simmered in the youth wing of the conservatives on Friday. Its leader, Paul Ziemiak, called for a broad discussion about the longer-term future of Merkel's Christian Democratic Union (CDU).

"We shouldn't only talk about how we want to shape the next four years in Germany but also what the CDU will stand for in future, which topics we can win elections with in the next 10 years and people go along with topics," he said.

Ziemiak said the CDU should also think about who would lead the party in the future.

Merkel, who long seemed impervious to criticism from within her own ranks, has faced a barrage of complaints since Wednesday's agreement, which left her bloc with six ministers - the same number as the SPD, which won fewer votes in the election.

Some commentators have suggested a mid-term review due two years in to the government could offer Merkel the opportunity to step down gracefully from a job she has held since 2005. (additional reporting by Gernot Heller and Reuters Television; Writing by Michelle Martin; Editing by Gareth Jones)