Germany's SPD leaders list key demands of Merkel for coalition


* SPD says minimum wage of 8.50 euros essential

* Party to seek backing from core members on Sunday

* Formal coalition talks could then start Wednesday

By Holger Hansen

BERLIN, Oct 20 (Reuters) - Leaders of Germany's SocialDemocrats (SPD) have listed their key demands of Angela Merkelahead of a meeting on Sunday in which they will seek the backingof 200 core party members for launching formal coalition talkswith the chancellor.

These include introducing a nationwide minimum wage of 8.50euros, equal pay for men and women, a financial transaction tax,greater investment in infrastructure and education, and astrategy to boost growth and employment in the euro zone.

No mention is made however of the tax increases forGermany's wealthiest which the SPD had campaigned for during theelection but which the chancellor has absolutely ruled out.

Merkel's conservative bloc - her Christian Democratic Union(CDU) and its Bavarian sister party, the Christian Social Union(CSU) - emerged as the strongest political force in the Sept. 22election. But they fell several seats short of a parliamentarymajority, forcing them to seek a coalition ally.

The SPD, which came a distant second to Merkel, was seen asthe most likely partner from the start; however the party istaking a stubborn approach as it struggles to avoid the mistakesit made during its 'grand coalition' with Merkel from 2005-2009.

It emerged from that legislature with its worst electionresult since World War Two, making many grassroots membershighly sceptical about another such union.

"This time I can guarantee that we will not strike acoalition agreement in which we do the opposite of what wepledged in the election," SPD Chairman Sigmar Gabriel toldGerman newspaper Bild on Saturday.

A draft of the declaration Gabriel will ask the SPD's topcadre to sign on Sunday and made available to Reuters states theSPD "agrees to enter formal coalition talks with the intentionof forming a government."

The party concedes some compromises will be necessary butlists 10 "essential" points beginning with the minimum wage.

Others include equal pensions for seniors in the former Westand East Germany, the ability to have dual citizenship, andmeasures to make it easier to combine work with family life.

If, as expected, Gabriel secures party backing on Sundaytalks on coalition policies and cabinet posts in a newgovernment would begin on Wednesday. They could last more than amonth.

German voters, international investors and Berlin's Europeanallies have mostly been expecting a grand coalition. Few expectan eventual partnership deal to greatly alter Merkel's cautiousdomestic and foreign policy agenda.

The chancellor flirted briefly with the idea of a coalitionwith the environmentalist Greens. But when those talks brokedown earlier this week, it strengthened the SPD's hand and agrand coalition seemed all but inevitable.

Such a partnership would enjoy an overwhelming majority inthe Bundestag lower house of parliament and find it easier topush legislation through the Bundesrat upper house, where thegovernments of Germany's 16 federal states are represented.

Once a coalition deal is struck, the SPD is still set toseek final approval in a poll of its grassroots members.

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