Merkel coalition's fate hangs in balance after threat

Migrants intercepted aboard dinghies off the coast in the Strait of Gibraltar are seen on a rescue boat as they arrive at the port of Tarifa southern Spain yesterday

After nearly eight hours of talk with the CSU party leadership, Mr. Seehofer said he saw three options: The CSU bows to the chancellor's asylum policy; or, as interior minister, he turns back some migrants at Germany's borders, a riskier option which could destroy the coalition; or, lastly, he resigns as party leader and minister. But it represents a big turnaround for Merkel.

"We have reached an agreement after very intense negotiations", Seehofer announced after reportedly tense negotiations on Monday, Agence France Press reported on Tuesday.

"After intensive discussions between the CDU and CSU we have reached an agreement on how we can in future prevent illegal immigration on the border between Germany and Austria", Mr Seehofer told reporters as he was leaving the CDU's Berlin headquarters.

If the CSU were to pull out of their alliance, Mrs. Merkel's party and her partners in the governing coalition, the center-left Social Democrats, wouldn't have enough votes to pass legislation, putting her government at risk.

The compromise leaves one of Merkel's biggest headaches unresolved: a deep rift with the CSU before a state election in October where it faces a stiff challenge from the far-right Alternative for Germany (AfD).

After the Bavarians' relentless pressure on Merkel, European leaders on Friday agreed to new measures to reduce immigration to the bloc and so-called "secondary migration" of asylum-seekers between countries. Interior Minister Horst Seehofer offered to quit his Cabinet post and the chairmanship of Bavaria's Christian Social Union (CSU) at a party meeting on Sunday.

Angela Merkel's face-saving deal with her conservative allies in Bavaria shows how indispensable the chancellor is to her party - even if she is weakened.

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That scenario scared all parties except the anti-immigration AfD which, polls suggest, could hope for further gains.

He could defy her orders by ordering border police to carry out his plan, which would force her to fire him and nearly certainly break up the CDU-CSU alliance, or he could accept a humiliating climbdown or resign.

Mr Seehofer proposed turning away immigrants from Germany's borders who had registered in other countries if Ms Merkel could not secure agreement with European partners on tougher measures to deal with the issue.

"She's switched camp from the moderates in the government coalition, left the SPD and is now joining the CSU, but by this she has lot a lost of her credibility within the coalition party and also in public opinion".

In Monday's deal, both sides agreed to set up closed "transit centres" - similar to existing facilities at airports - that would allow German authorities to speedily process applicants.

Applicants rejected by Germany will have to return to their first European Union country of arrival, if that country agrees to take them.

Member countries could also create processing centres to determine whether the new arrivals are returned home as economic migrants or admitted as refugees in willing states.

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