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Martin Schulz calls for ‘United States of Europe’

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The leader of Germany’s Social Democrats has called for EU member states to commit to a “United States of Europe” by 2025, setting out an ambitious European reform agenda as his party agreed to talks with Angela Merkel on the formation of a new ­government.

Martin Schulz told a party conference in Berlin on Thursday that he wanted EU member states to agree a new “constitutional treaty” to establish a federal union and that countries that did not sign up would have to leave the bloc.

“Such a constitutional treaty has to be written by a convention that includes civil society and the people. This constitutional treaty will then have to be put to the member states and those that don’t approve it will automatically have to leave the EU,” Mr Schulz said.

He also called for a drastic shift in Germany’s position on eurozone reform. His stance echoes several demands made by French president Emmanuel Macron but is at odds with longstanding positions of the Merkel government.

“We don’t need a European austerity diktat, we need investments in a eurozone budget,” the SPD leader said. “We need a European finance minister who curbs the race to the bottom in tax policy and ends the insufferable avoidance of tax. We need a European framework for a minimum wage that ends wage dumping.”

In a dig at the former German finance minister, Mr Schulz added: “The EU cannot afford another four years of German policy towards Europe à la Wolfgang Schäuble.”

Mr Schulz’s proposal to hold exploratory talks with the CDU/CSU over the formation of a new government was approved by a large majority of delegates on Thursday evening.

The proposal stresses that the forthcoming talks are not aimed specifically at a new “grand coalition” and that the party base will have to approve any future deal with Ms Merkel.

The SPD chief insisted that talks would “not automatically” lead to a so-called grand coalition, but urged his reluctant base not to rule out a formal government alliance from the outset. “We don’t have to govern at any price, but we equally should not avoid governing at any price,” he said.

The SPD chief has come under growing pressure to end the impasse in Berlin and renew the tie-up with Ms Merkel’s Christian Democrat Union and its Bavarian sister party, the Christian Social Union. 

The CDU/CSU and SPD have been in government since 2013, but all three parties lost heavily at the last general election in September. After a lacklustre campaign helmed by Mr Schulz, the Social Democrats won just 20.5 per cent of the vote, their worst result in modern German history. On Thursday, Mr Schulz described the result as a “bitter defeat” that highlighted the need for renewal. 

“We didn’t manage to answer the question [of] what social democracy stands for in the 21st century. Our biggest problem is that [we] have lost our clear profile,” he said. Many voters, Mr Schulz said, saw the SPD no longer as their representative but as “part of the establishment”.

The September defeat prompted a vow from SPD leaders to rebuild the party in opposition, as well as repeated pledges from Mr Schulz that he would not renew the grand coalition. But he was forced to break that promise last month, after the collapse of coalition talks between Ms Merkel’s conservative bloc, the pro-business Free Democrats and the leftwing Greens. 

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The breakdown leaves a grand coalition the only realistic option for a stable German government. To avoid a repeat election, Ms Merkel could also form a minority government — a scenario favoured by some Social Democrats but one the chancellor has all but ruled out. 

The emphasis on EU reform marks a recent departure for Mr Schulz, a former president of the European Parliament, who was criticised for failing to address EU issues during the campaign.

Rolf Müller, a SPD member from Thuringia who followed Thursday’s speech at the conference, said: “We could have won 7 to 8 per cent more in the election if he had given a speech like that in the summer. He just never talked about Europe.”

Elisabeth Humbert-Dorfmüller, another SPD member, suggested the new EU focus could raise the party’s profile: “He set out a vision which we didn’t have before. He also has credibility because he himself is from the EU and he can really drive forward the debate.”

The SPD conference on Tuesday also elected Mr Schulz for another term as party leader. He won the support of 81.9 per cent of delegates - down from 100 per cent when he first stood earlier this year.

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