Two opposition parties said Thursday they are close to an accord with Chancellor Angela Merkel that would enable Germany to ratify within weeks the fiscal compact imposing eurozone deficit caps.
Political analysts had been standing by for a stalemate lasting months, with the opposition parties exploiting a chance to embarrass
the chancellor and wring concessions from her on other issues.
But the meeting in Berlin with the Social Democratic Party (SPD) and Greens turned out to be unexpectedly amicable.
SPD leader Sigmar Gabriel claimed that Merkel had yielded ground.
"The government is giving up its resistance to a supplementary pact on growth and investment," he said, referring to a proposal from French President Francois Hollande for the eurozone nations to reach
an accord on stimulus to revive lagging economies.
The opposition is to meet again with Merkel on June 13 to finalize terms, leading to bipartisan backing for a bill that integrates the fiscal compact, agreed by European leaders in March, into German law.
The bill requires backing from two-thirds of the German parliament since it indirectly affects the constitution. The compact will oblige 25 of the 27 EU member nations to cap deficits and accept budget
discipline.
Merkel has bent in the political wind in recent days, saying she is open to a growth compact as sought by newly elected Hollande.
Juergen Trittin, co-leader of the Green Party parliamentary caucus, said after meeting the chancellor that the next step was for Merkel to reach an accord with France, Spain and Italy.
Earlier in the day, Gabriel made his own concession, backing off demands for so-called eurobonds.
After months of appearing to support calls by Hollande and others for the 17 eurozone governments to raise money jointly with eurobonds
on capital markets, Gabriel adopted a more cautious line.
He told ARD public television that eurobonds "in the general sense" of "debt guaranteed in common" would "definitely" not be
acceptable to his centre-left party. He called instead for a treaty to pay down excessive debts.
"Let us mutualize only that part of the debt which exceeds 60 percent of gross domestic product and let's pay that off over 25 years," he said. "That is a form of eurobonds if you will, but with clear
conditions."
The Social Democrat said the European Union had $25 billion in unused funds that could be mobilized to promote growth. Merkel has also pressed Brussels to unlock its
special funds.
Trittin said on Deutschlandfunk public radio that joint borrowing by eurozone governments was a good idea, but not yet.
European Union treaties would have to be changed before they were instituted, he said.
He backed Gabriel's call for a fund to mutualize the excessive debt.
The Left Party, which also attended the talks at Merkel's office, continues to urge increased government spending, and has been silent
about perceived risks from excessive borrowing. It had not been expected to vote for the fiscal compact.
Separately, German Finance Minister Wolfgang Schaeuble met with
officials of the states to press them to approve the fiscal compact.
Several states are angry at plans to fine them if they breach the fiscal compact's deficit limits. They say that such fines already
apply under an existing deficit cap, and the legislation would "unfairly" increase those penalties.
