BERLIN – Chancellor Angela Merkel is insisting that Germany's new government must keep a lid on spending as she prepares for the decisive phase of coalition talks with her traditional center-left rivals.
Merkel's conservative Union bloc and the Social Democrats hope to reach agreement this week on a "grand coalition" of Germany's biggest parties. That's more than two months after the conservatives won elections but fell short of a parliamentary majority.
Many details of the new government's agenda remain unresolved and Merkel's conservatives are adamant they won't accept tax increases to finance spending — which the Social Democrats campaigned for before the elections.
Merkel has pushed austerity elsewhere in Europe during its debt crisis. She insisted at a union conference in Frankfurt on Monday that Germany "must stop running up debt."