Germany's Social Democrats threw down the gauntlet to Chancellor Angela Merkel yesterday and insisted she would have to end her controversial European austerity policies if they were to form a grand coalition with her conservatives in the wake of Sunday's general election.

The demand came from Martin Schulz, the influential Social Democrat (SPD) president of the European Parliament, as Merkel faced the difficult task of finding a willing coalition partner for her victorious Christian Democrats (CDU), which fell just short of gaining an absolute majority.

Interviewed for a special post-election edition of Der Spiegel, Schulz was asked about Merkel's austerity regime in financially stricken southern Europe: "Merkel will not be able to continue with these policies," he told the magazine bluntly.

Schulz insisted that in a coalition with his party, Merkel would have to "do something" about mass youth unemployment in the region.


"Merkel must follow up her words of social concern with action," he said.

For her part Merkel has declared: "Our policy on Europe will not change."

- Independent