Ex-communists set to join Berlin coalition

Mayor Wowereit is talking to ex-communist Gregor Gysi

Berlin's former communists look set to take a place in the city's government, after attempts to form a coalition without them collapsed.

All roads lead to reconstruction

Mayor Klaus Wowereit

Negotiations over power sharing between the Social Democrats (SPD) and the PDS, the modern incarnation of East Germany's former ruling communist party, got under way on Wednesday morning.

The Social Democrats, which took the largest share of the vote in October's elections, had hoped to form a coalition with the Greens and the Liberals.

But they failed to find agreement on the drastic measures required to fill the 40bn euro ($36bn) hole in the city's budget, which forced the government's collapse in August.

The decision to invite the PDS into government in the long-divided city is controversial and has been condemened by the opposition Christian Democrats as "treason".

'Tough cuts'

Analysts have suggested that a red-red coalition in the capital could also be an embarrassment to federal Chancellor Gerhard Schroeder just a year ahead of nationwide elections.

October's election results

Social Demcrats 29.7% - up seven

Christian Democrats 23.7% - down 17

Party of Democratic Socialism 22.6% - up five

Free Democrats 9.9%

Greens 9.1%

But the current Social Democrat mayor, Klaus Wowereit, said a coalition with the former communists had always been an option.

"Both sides know what they are getting themselves into," he said.

Negotiations for a three-way coalition with the Greens and Liberals collapsed when the Liberals refused to accept tax increases which the others said were vital to restore the city's finances.

Mr Wowereit said that a condition of any alliance with the PDS would be its agreement to a reformist programme.

"All roads lead to reconstruction," he said. "We are going to have to make tough cuts".

The PDS has already indicated its support for tax increases.

"When there is a deficit in the state budget, spending can be reduced and income increased. In Berlin the situation is so serious that both must be done," said Berlin PDS leader Stefan Liebich.

The former communists' strong election performance - taking 22.6% of the vote across the city and 48% in east Berlin - led to calls at the time for them to be first in line for the coalition talks.

But Mr Wowereit justified the attempt to form a traffic light coalition with polls showing that most Social Democrats' preferred the three-way option.

The city was forced to hold early elections when a scandal around the collapse of a city-owned bank caused the long-standing "grand coalition" between the Social Democrats and the Christian Democrats to fall.