German SPD Party Approves Merkel Coalition

Germany's center-left Social Democrats overwhelmingly approved the formation of a "grand coalition" government under Chancellor Angela Merkel Saturday, removing the final obstacle to her third term.

Party treasurer Barbara Hendricks said a resounding 76 percent backed a left-right coalition pact after a postal ballot among its 475,000 members.

The unprecedented, binding referendum, which drew nearly 78 percent turnout, marked an unqualified triumph for Social Democratic (SPD) chief Sigmar Gabriel nearly three months after his party's bruising loss to Merkel's Christian Democrats (CDU) in the general election.

"I have never seen my party so politically engaged in the 36 years I have belonged to it," a beaming Gabriel told reporters, flanked by the party leadership.

"It's been a long time since I was so proud to be a Social Democrat."

The vote means Merkel can be formally re-elected by the Bundestag lower house of parliament, making her only the third chancellor in German post-war history to serve a third term.

The coalition is to make formal announcements on the cabinet on Sunday but media leaks revealed many of its most prominent members.

Finance Minister Wolfgang Schaeuble, one of the main architects of Germany's tough-love response to the eurozone crisis, is to stay on.

Frank-Walter Steinmeier of the SPD is awaited back at the foreign ministry, where he served during Merkel's first term from 2005-2009.

Meanwhile Gabriel is to head up a "super-ministry" in charge of the economy and Germany's ambitious energy transformation away from nuclear power and toward renewables.

One surprise is that Germany appeared poised to tap its first woman as defence minister, mother-of-seven Ursula von der Leyen.

Merkel and her CDU romped to victory in the September general elections, winning 41.5 percent on the back of a strong economy, falling just short of what would have been an extraordinary absolute majority.

The Social Democrats, a 150-year-old political force, limped to second place with 25.7 percent in their second worst showing since World War II.

The pro-business Free Democrats, Merkel's junior partner during her second term, crashed out of parliament for the first time since 1948.

Gabriel called the rank-and-file vote to rally his often fractious party around the left-right government and drove a hard bargain during the coalition talks, which wrapped up in late November.

He extracted a number of concessions including Germany's first national minimum wage, permission for dual citizenship for children of immigrants, restrictions on temporary jobs and a lowering of the retirement age to 63 for those who paid into the system for 45 years.

A poll for public broadcaster ZDF published Friday showed that 49 percent of Germans would welcome a grand coalition while 33 percent opposed it.