Schroeder's Democrats irritate Angela Merkel's conservatives

Chancellor Gerhard Schroeder's Social Democrats (SPD) laid claim on Thursday to being the top party in Germany's inconclusive election, sparking a heated row with Angela Merkel's conservatives before key coalition talks.

Hours before the rival parties meet for the first time since the tight vote, SPD chief Franz Muentefering said he considered Merkel's Christian Democrats (CDU) and their sister Christian Social Union (CSU) to be two separate parties.

Current parliamentary rules recognize the CDU and CSU as a single bloc, but if they were seen as separate the SPD could claim it won the most votes in Sunday's cliff-hanger election, strengthening its bid to keep Schroeder in the Chancellery.

With 35.2 percent of the vote, Merkel's combined CDU/CSU came out narrowly ahead of the SPD in Sunday's vote, but did not win enough support to form a ruling coalition with its preferred partner, the liberal Free Democrats (FDP). That has forced Merkel into coalition talks with Schroeder's SPD.

"We don't dispute that unified parliamentary groups can exist, but it must be clear that coalition talks are conducted by individual parties," Muentefering said.

The remarks elicited a fierce response from the CDU, with leading conservative Wolfgang Schaeuble accusing the SPD of a "democratic principles deficit".

The two parties are due to meet at 1200 GMT and give statements when the discussions end. Ahead of that meeting, the CDU/CSU leadership was conducting talks with the FDP.

The formation of an alliance between Germany's two largest parties is now seen by many experts as the best of several less-than-desirable options for Germany.

But prospects for a deal have been complicated by Schroeder's insistence he remain chancellor and the bitter animosity between the two camps, aggravated by Schroeder's election-night taunting of Merkel on national television.

Merkel had been vowing deep reforms of Germany's economy, but her party will probably struggle to push through its program if it ends up governing with the SPD, which attacked Merkel during the election campaign as a cold radical bent on destroying the country's cherished welfare state.

The deadlock, which must be resolved before Oct. 18 in order to avert the prospect of new elections, could hinder European Union-level decisions on reforms needed to boost the bloc's economy and re-energize the EU after the rejection of a planned constitution.

Prolonged political inertia could also damage Germany's struggling economy. German growth is now the slowest in the 25-nation EU and unemployment topped the 5-million mark this year for the first time in the post-war era.

All eyes are now focused on the coalition talks in the hopes of a rapid deal and the formation of a stable new government, Reuters reports.