LONDON - Coalition negotiations between Germany's two biggest parties have resumed, after leaders of the centre-left Social Democrats (SPD) voted on Sunday (Jan 21) to approve a deal with Chancellor Angela Merkel's centre-right Christian Democratic Union (CDU) to form a new government.
But the SPD's decision appeared to split the party along generational lines, with far-reaching consequences for Germany's future. And although it guarantees Dr Merkel's continued rule, it also confronts the German leader with some very awkward and unpalatable choices.
Both parties fared badly in last September's general election. The CDU attracted only a third of the ballots cast, one of its worst results in over half a century, while the SPD managed to get only 20 per cent, its worst result in a century.
The SPD, which has already served as Dr Merkel's coalition partner since 2013, drew the only conclusion feasible from its disastrous performance: that it needed to retreat to the opposition parliamentary benches, and regain its image as a real voice of Germany's younger or less wealthy voters.
For, by associating itself with power for too long, the party has progressively lost these constituencies to both the far-left Communists and the far-right, anti-immigrant Alternative for Germany, two hitherto fringe parties which, between them, attracted an unprecedented one-fifth of the German ballots.
The snag for the SPD is that, after no less than four months of talks, Dr Merkel failed to persuade two small mainstream parties to join her government, so she turned again to the Socialists for help.
The SPD could have turned down her appeal, but that would have exposed Germany's oldest established party to accusations of irresponsibility, and may have resulted in early elections, which all opinion polls indicate would produce an even more divided parliament.
SPD leader Martin Schulz therefore opted for a coalition, but one based on a set of agreements over the principles of governing with Dr Merkel, a text which extends to 23 typed pages.
His tactic is to suggest that his party is joining the government not because it wants power, but because it has to for the good of Germany, not to prop up Dr Merkel, but to ensure that she implements at least some of the SPD's policies.
Yet many of the SPD leaders who gathered for a special session over the weekend to approve this governance document baulked at both its contents and at the principle of being in a coalition in which they fear they will always be overshadowed by Dr Merkel.
Spearheading the fierce opposition to the deal was 28-year-old Kevin Kuehnert from Berlin who runs the SPD's youth wing. His rebellion against his elders was initially and patronisingly dismissed as the "dwarfs' uprising". But there is no question that Mr Kuehnert delivered a heavy and perhaps mortal blow to the reputation of Mr Schulz, whose speech to the delegates fell flat. Mr Schulz is now "the SPD's tallest dwarf" is how a noted European media commentator put it dismissively.
The SPD was only swayed to support a coalition deal with Dr Merkel by an impassionate speech from Ms Andrea Nahles, the party's parliamentary leader; she is now widely seen as a future German leader.
But Ms Nahles' feat was only possible after SPD delegates were promised that their party will extract further concessions from Dr Merkel.
"We'll negotiate until the other side squeals", Ms Nahles told the party delegates, to thunderous applause.
That presents difficulties for Dr Merkel, who has argued all along that the governance deal she signed with the SPD is non-negotiable, and represents the limits of her concessions.
She is now about to discover that, if she really wants to conclude a coalition agreement, she will have to renegotiate many of the contentious SPD demands.
These include, among others, greater spending on social welfare, the abolition of private health insurance schemes which, the SPD claims, create parallel national medical services, restrictions on increases in spending on the military and the admission of more immigrants.
With the economy buoyant and government tax coffers full, Dr Merkel can throw some money at these SPD demands and still accomplish her goal of balancing Germany's Budget. But with every concession she has to make, she risks alienating her own electoral base.
Furthermore, the SPD's entry into government is still not guaranteed as the deal which party leaders have approved is just a preliminary one.
The SPD's 400,000 rank-and-file members will eventually have to vote to approve any final coalition agreement, and that will not happen for at least another month.