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FACTBOX-What happens if Germany's SPD votes against coalition with Merkel?

BERLIN, March 2 (Reuters) - The result of a ballot of the Social Democrats' (SPD) roughly 464,000 members on whether to join a coalition with German Chancellor Angela Merkel's conservative bloc that would end political limbo in Europe's largest economy will be announced on Sunday.

The outcome of the vote is unclear. A poll released on Wednesday showed 56 percent of SPD voters favoured another tie-up with Merkel but it surveyed a far broader group than the party members taking part in the decisive ballot.

The SPD's Barbara Hendricks, who is environment minister in Germany's outgoing coalition, said on Thursday she expected members to back a new alliance with Merkel's conservatives by a margin of 60 percent.

But Kevin Kuehnert, leader of the SPD's youth wing, told Reuters on Friday he was optimistic that party members would reject such an alliance.

Many senior figures in Merkel's Christian Democrats (CDU) want to try out a minority government if the SPD members reject a 'grand coalition'.

In November - after the collapse of coalition talks with the liberal Free Democrats (FDP) and ecologist Greens - Merkel said she would prefer a new election to leading a minority government. But she has since been more guarded on that issue.

Many in the Christian Social Union (CSU) - the Bavarian sister party to Merkel's CDU - along with many in the SPD want a new election if SPD members vote 'No' to a grand coalition.

Here is an outline of what will happen if SPD delegates vote against coalition talks.

* The onus shifts to German President Frank-Walter Steinmeier to decide how to proceed. He would meet with Merkel and could urge her to try to form another coalition. She could try to build a three-way alliance of the conservatives, FDP and the Greens. But these unnatural partners are unlikely to want to join forces after their initial attempt at building an alliance collapsed in November when the FDP spectacularly walked out of talks, eroding trust between them.

* Merkel - or another candidate if her conservatives take the unlikely decision to oust her - could decide to head up a minority government in what would be a post-war first for Germany. If she were to form such a government, the procedure would be as follows:

* Steinmeier would set a date for a 'chancellor vote' in the Bundestag lower house of parliament and suggest Merkel run. If she gets an absolute majority, she becomes chancellor.

* If she fails to get an absolute majority in that first round of voting, another vote can be held within 14 days.

* If she fails to get an absolute majority in the second round, a third vote is held. If she gets a plurality in that vote, Steinmeier would need to appoint her chancellor within seven days. If she does not get a plurality, Steimeier would have seven days to decide whether to appoint her as a minority chancellor or dissolve parliament and call a new election.

* If Steinmeier were to call a new election, it would have to take place within 60 days. While Merkel's personal ratings are slipping, she has said she would want to run for the conservatives if another poll is held.

* Once Merkel has become chancellor, she could ask for a confidence vote in parliament. She could force a new election by urging her allies and other lawmakers to vote against her. (Reporting by Michelle Martin and Matthias Sobolewski; additional reporting by Paul Carrel and Gernot Heller Editing by Gareth Jones)