As coalition haggling resumes, Merkel races to stop power ebbing

And the outcome of the talks gathering the SPD as well as Merkel's CDU party and Bavarian allies CSU is far from certain.

Stung by a record low score in September's elections, the SPD is torn internally on whether it should once again govern under Merkel.

Its youth wing is energetically canvassing for votes to veto any deal for a new grand coalition known as GroKo in Germany, when the 440,000 members of the country's second biggest party holds a referendum on the question.

With the jury still out and the risk of snap elections still looming, Merkel is anxious to stop the process from dragging.

Her camp wants negotiations wrapped up by mid-February, giving the SPD a few weeks to organise its crucial vote. A government could then be in place by the end of March.

What is clear is that delay is eating away at Merkel's influence domestically and internationally.

In Germany, questions are being raised about the autumn of her reign, even if no serious candidate has emerged to rival her.

"Each additional day where she has to content herself with being just a caretaker chancellor weakens her, and the longer the negotiations go on, the more the population's discontent grows," said Die Zeit weekly.

And abroad, attention is drifting from her to Germany's neighbour France and its young leader Emmanuel Macron, who is increasingly hailed as the go-to leader in Europe.

Nowhere was the contrast between Macron and Merkel's position more obvious than at the World Economic Forum's annual meeting of political and economic leaders in Davos this week, where analysts said the French leader stole the show from the veteran chancellor.

"Merkel's position could be further weakened on the international stage -- at least that's the impression given at Davos," noted Spiegel weekly, noting that "Macron meanwhile is increasingly taking on the role of the leader of the Europeans."

'Things have changed'

In fact, Merkel herself acknowledged to the Davos crowd that the political impasse in Germany is hampering Europe's biggest economy from taking action.

She was impressed by "how things have changed in four months, at how the world is developing quickly and that a country that wants to contribute to shaping globalisation needs to be able to act 24 hours a day," she said.

Just a few months ago, Merkel appeared to be at the top of her game, with some commentators even crowning her "Leader of the Free World" after the arrival of Donald Trump as US president.

But September's polls left her without a majority and struggling to find partners to govern, as the far-right AfD party capitalised on anger over a record influx of asylum seekers to snatch voters from established parties.

After Merkel's bid to form a government with the smaller left-leaning Greens and pro-business FDP fell through, she was forced to woo back erstwhile partner the SPD.

But even sitting at the negotiating table for SPD leader Martin Schulz is a massive climbdown for the former European Parliament chief, who had vowed after elections to take his party into the opposition.

In more bad news for the centre-left party's leadership, a preliminary blueprint hammered out with the conservatives has been savaged for not adequately reflecting the SPD's social agenda.

To have a chance at winning the party base's approval, Schulz and the SPD leadership would therefore have to extract further concessions from the conservatives, including tougher restrictions on short-term work contracts or a universal health insurance system.

Not only are the stakes high for Merkel, but also for Schulz and the SPD, particularly if Germany were forced to return to the ballot box.

Polls this week showed support for the SPD plunging to a record low of 18 percentage points, while Merkel's conservative alliance scored 31.5 percent -- both apparently losing ground from September.