Germany’s Social Democratic Party is looking for ways to sweeten another stint in government with Angela Merkel as the political impasse in Europe’s biggest economy comes to a head.
When 600 SPD delegates vote Sunday on a proposal by party leaders to start formal coalition talks with the chancellor’s bloc, they’ll also be deciding whether Germany heads back to stability or lurches toward a repeat election that risks being as inconclusive as last year’s.
SPD leaders predict a tight vote as the party weighs calls -- including by Merkel -- to help anchor Germany’s political center while young party activists lead a campaign to shun policy compromises and go into opposition.
Here’s a look at what’s at stake at the convention in Bonn, the former capital.
The vote On the table is a 28-page policy outline produced in marathon exploratory talks with Merkel’s Christian Democratic-led bloc on Jan.
Delegates must decide if it’s a sufficient basis on which to forge a common platform for government.
Critics decry the absence of key Social Democratic demands such as expanding public health insurance and raising taxes on the wealthy.
Party head Martin Schulz, backed by the SPD’s regional prime ministers, many lawmakers and labor leaders, has spent the week trying to sell the plan to the party base.
The sweeteners In a concession to the SPD, the framework deal includes a mid-term review of any coalition pact, which would normally run through 2021.
Schulz denies it’s an escape hatch for the SPD, which fell to its worst election defeat since World War II after serving as Merkel’s junior partner for the last four years.
Framing the clause as a win for the SPD is likely to play a role when party leaders seek potentially decisive swing support at the convention from membership-heavy state chapters in the key industrial regions of North Rhine-Westphalia, Baden-Wuerttemberg and Bavaria.
Schulz and Merkel both say that full-scale coalition talks will give the SPD a chance to improve on the initial deal.
Getting to yes Should Schulz succeed in his mission to win over delegates, then Merkel, her Bavarian CSU allies and the SPD could sit down for negotiations on a full policy agenda and cabinet posts next week.
Volker Kauder, Merkel’s chief lieutenant in parliament, said the exercise could wrap up in two weeks.
But that’s not the end of it: the SPD will put the accord to a vote of its more than 400,000 members.
A ‘No’ Vote If opponents of another “grand coalition” with Merkel prevail, Germany -- and by extension Europe -- faces a bout of political instability with no clear outcome.
While no successor to the chancellor is immediately in sight, questions about Merkel’s future after 12 years in office would intensify, though there’s no constitutional limit for her to stay on as acting chancellor.
One option for Merkel would be to try to govern without a majority, a novelty for postwar Germany but a scenario she is reluctant to pursue.
The second is a new election, which polls suggest would resolve nothing.
Both carry inherent risks.
Minority government It’s never been tried in the 69-year history of the Federal Republic.
But short of the equally unprecedented step of holding a repeat election, a government supported by parties outside a coalition may be the only option.
With only 246 seats in the 709-member lower house, Merkel’s bloc would rely on shifting majorities to pass legislation.
Consensus policies such as public infrastructure investment, increased funding for old-age care and expanding broadband access could be on the agenda.
Measures to strengthen Europe would probably find favor with the Social Democrats and Greens.
such an arrangement wouldn’t be stable -- and probably wouldn’t last a full four years.
Another election  Attention would shift to whether Merkel has her bloc’s support for running again, which she has vowed to do if a repeat election becomes inevitable.
Skepticism has been growing among critics who want to pull her Christian Democratic Union and the Bavarian CSU to the right.
“If she doesn’t manage now to get the Social Democrats behind her and have a grand coalition, I think her days will also be counted and she will probably not serve the full four years,” Guntram Wolff, director of Bruegel, a Brussels-based research group, said in a Bloomberg Television interview.
Yet while Merkel would come under pressure to stand aside in favor of a candidate better able to unify her bloc, her opponents are hobbled by the lack of a recognizable face to take her place.
And she remains popular with the voting public.
A ‘No’ vote by the SPD would mean all bets are off, and it’s even conceivable that Germany could be in the same situation six months from now.
— With assistance by Matthew Miller.
It`s been a tough week for some governments in eastern Europe.
One is struggling to get off the ground, one is about to get its third prime minister in a year and another faces a parliamentary debate on corruption.
Rather than exposing the weakness of leaderships in some of the European Union`s youngest democracies, the apparent turmoil masks the strength of the populist strongmen who run the countries.
Czech billionaire Andrej Babis failed to form a cabinet, though he will remain in power and his popularity is growing.
The leader of Romania`s governing party, Liviu Dragnea, got to pick a new prime minister after Mihai Tudose resigned following their feud.
Bulgarian premier Boyko Borissov will hear new corruption allegations and face a no-confidence vote, though it amounts to little more than an embarrassment.
The forces of nationalism and Donald Trump-style politics have swept across Europe.
It`s in the continent`s east where they have really taken hold and are growing stronger.
Most prominently, populists in Poland and Hungary are increasing support by clashing with the EU mainstream and promising to make their countries great again.
  “Eastern European leaders are telling voters ‘don’t trust institutions, trust me,”’ said James Sawyer, an analyst at political risk consultants Eurasia Group in London.
“And voters are increasingly rewarding personality-driven politics.
Some of the political upheaval we`re seeing now is the clash of personalities and institutions.
” Babis, 63, is busy cementing his power in Prague after winning elections last year by pledging to run the Czech Republic like a business.
He was forced to resign on Wednesday after mainstream parties refused to join a coalition.
President Milos Zeman promised him another try.
Dragnea, 55, whose Social Democratic Party now wants to overhaul the judiciary, has been pulling the strings in Romania since 2016.
He`s unable to take the top job himself because of a criminal conviction and will appoint his third prime minister.
Tudose lasted six months.
Bulgaria currently holds the EU`s rotating presidency.
 Borissov, 58, a former bodyguard, has ruled on and off since 2009 with pledges to raise wages and improve infrastructure in the EU`s poorest state.
The opposition triggered a no-confidence motion in his government for next week, a frequent exercise that has failed every time during the 27 years since communism collapsed.
The real absence of turmoil has been evident in financial markets.
Poland, the Czech Republic and Hungary boast the best-performing emerging-market currencies since the beginning of 2017.
Their stock markets also hit multi-year highs in the last 12 months.
Economies in the region, which receives billions of euros of subsidies from the EU, probably grew 3.
7 percent last year, the fastest pace since 2011, according to a weighted average of country forecasts in a Bloomberg survey.
QuicktakePoland’s Populist Turn It’s enabled politicians to make  promises.
Poland`s Law & Justice Party under Jaroslaw Kaczynski won an unprecedented majority in parliament in 2015 and has built on that popularity by introducing extra payments for families and railing against opponents and the EU.
Kaczynski, 68, replaced his prime minister late last year with another party loyalist.
Hungarian premier Viktor Orban, with his self-described “illiberal democracy” and fences to keep out refugees, has been a lightning rod for western European criticism of how the former communist region has turned out politically.
Orban, 54, is expected to win his third consecutive election on April 8, helped by a fierce campaign against Hungarian-born billionaire George Soros, who said attacks on him were reminiscent of Nazi-era propaganda.
“These strongmen managed to tap into the general dissatisfaction of the people in these post-communist countries,” said Judy Dempsey, a fellow at Carnegie Europe in Berlin.
“They are doing quite well economically.
But there’s a general disgust with how politics has been conducted in the past three decades.
” — With assistance by Ladka Mortkowitz Bauerova, Samuel Dodge, Andra Timu, and Elizabeth Konstantinova.
Two North Korean athletes taking part in the World Para-Nordic Skiing World Cup in Germany have given a rare interview to the BBC`s Korean Service.
Ma You-chul and Kim Jung-hyun could well end up being the first North Koreans to attend the Winter Paralympic Games, which this year are taking place in Pyeongchang, South Korea.
A karate black belt and a decade’s worth of experience poring over European Union law may not be enough to help one of Britain’s top EU officials fight her way out of Brexit limbo.
Even though Eleanor Sharpston, one of a handful of legal advisers to the bloc’s highest court, makes her living giving opinions on big cases, she admits to being in the dark about whether she’ll be able to keep her job once Brexit kicks in next year.
While Britain’s two judges at the Luxembourg-based Court of Justice of the EU seem likely to be turfed out, Sharpston’s position is more nuanced because the bloc’s treaty leaves it open whether she will have to leave her post once the U.
has exited the EU.
“What are the conclusions that will be drawn, I suspect may be more influenced by politics than law,” Sharpston said in an interview, pointing to texts that suggest that an advocate general, her formal title, is an independent member of the Court and so may be saved from the cull.
The politicians still don’t know.
EU Council President Donald Tusk and European Commission chief Jean-Claude Juncker have even dangled the idea that Brexit is not etched in stone as both sides gear up for the start of negotiations on Britain’s future with the bloc -- a phase that leaders in Europe have said will be tougher than the initial talks on the divorce terms.
Uncertainty In the meantime, the fate of British nationals working for the EU is unclear and may vary depending on where they work.
Those on temporary contracts are already less likely to have these converted into safe, long-term deals.
But, more generally, there’s an atmosphere of uncertainty.
Sharpston, 62, is one of more than a hundred Brits in Luxembourg left in limbo at EU institutions including the courts, the Court of Auditors and the European Investment Bank.
The European Commission, the EU’s executive authority in Brussels, has by far the biggest number of U.
staff, about 900 people, including some 90 who work in the authority’s Luxembourg offices.
Juncker wrote a letter to his staff the day after the Brexit vote to assure U.
colleagues “that he will do everything in his power” to help them.
“Some are holding off applying for citizenship as they don’t want to lose money,” said Fiona Godfrey, co-founder of the expat campaign group BRILL -- British Immigrants Living in Luxembourg.
“The discussions among my friends who are EU officials only focus on potential salary and pension losses and the lack of future promotion rights.
” Karate Diploma Like many compatriots, Sharpston feels at home in Luxembourg and doesn’t move in expat circles.
She speaks the local language plus French and German and has written court opinions in Spanish, Italian and Portuguese.
Pride of place on the wall of her court office is her black belt Shotokan karate diploma -- she trains three times a week and helps out with teaching.
While Court staff don’t publicly express their views on Brexit, it’s hard to ignore how painful the Brexit process must be for someone like Sharpston, who sees the EU as “a big success story.
” “The trouble is that the EU has been banked invisibly,” she said.
For her there are so many benefits, such as slashed mobile phone roaming charges, that derive from the EU that people and many of her compatriots now “simply take as part of ordinary life.
” “I’m immensely sorry for young people who feel that this has put a shape on their future that is not what they expected,” she said.
Court Scapegoat Seeing how her court, the highest judicial authority in the EU, has been made a scapegoat in the Brexit talks, doesn’t leave Sharpston indifferent either.
Her current term runs until 2021 and, without Brexit, she says she might have sought another one.
But whether she can stay on beyond March 2019 is “not something I can influence.
” If she does lose her job, at least Sharpston would have a way to vent any anger.
 One day, she may try out for a 2nd Dan, the next arduous step after getting a black belt.
“That would require a period of time and concentration,” she said, “and I’d need to feel I was ready.
May refuses to be drawn on how she would vote in second referendum Sign up to receive the Brexit Bulletin in your inbox, and follow @Brexit on Twitter.
Theresa May was handed a chance last night to put to rest growing European speculation that the U.
could change its mind on Brexit.
She didn’t take it.
European Union leaders have made a series of increasingly generous offers to the U.
in recent days, saying the bloc would welcome Britain back if the public changed its mind.
EU President Jean-Claude Juncker, once seen as a hardliner when it came to Britain, went as far as saying he would help the U.
come back after Brexit if voters had a change of heart.
As calls for a second referendum grow in the U.
, anti-Brexit politicians are seeing an opportunity.
May was interviewed by France 2 to mark a Franco-British summit on Thursday (more on that below).
She was asked how she would vote if there were a second plebiscite.
While she was emphatic that there wouldn’t be a rematch, she refused to be drawn on how she would cast her ballot if she got one.
“Circumstances change,” the prime minister said, according to a a transcript of the interview provided by her office.
Does that mean she would vote for Brexit? “No, I didn’t say how I would vote,” she said.
“If a vote was to come up I would do what I did last time round which was sit down and look carefully at the issues.
But there isn’t going to be another vote, so this is not an issue.
” May, who voted Remain in the referendum of 2016 and campaigned only moderately for that cause, has been asked this question before, back in October.
She’s had time to practice the response, but it hasn’t changed.
It’s worth pointing out that there are many obstacles in the way of a second referendum, and as polls remain tight it’s not clear that a rematch would produce a different result.
Any plebiscite would have to be approved by a majority in Parliament, and lawmakers would probably need to see a big move in public opinion to make that leap.
Still, if the Brexit deal that comes back from Brussels in October falls short of what everyone has been led to expect, it could trigger a shift in the public mood.
  What do you think of May’s position? Do you have any other Brexit questions? To keep the discussion going, join our new Facebook group, Brexit Decoded.
 I’ll be doing a Q&A session at 1 p.
  Brexit Latest ‘Be My Guest’ | French President Emmanuel Macron told Theresa May that the U.
’s key financial services industry can only retain full access to the single market if Britain signs up to budget payments and European court rulings.
He stuck to the EU script, saying it was up to the U.
to decide its course.
“I am here neither to punish nor to reward the U.
,” Macron told a joint news conference.
“You want to accept a single market with finance being part of it? Be my guest, but that means financial contributions and accepting European jurisdiction.
” The EU won’t accept “hypocrisy” that would undermine the single market.
Boris’s Bridge | Boris Johnson told Macron that a bridge should be built over the Channel to connect France and Britain, the Times reported.
Macron liked the idea: “Let’s do it,” he is reported to have said.
Shippers, architects and political opponents were quick to criticize the suggestion.
£40 Billion Bargain | The exit bill May agreed to pay to move Brexit talks along may have caused outrage in some quarters, but an analysis by Bloomberg Economics shows it will pay for itself in less than three years if it helps Britain secure a trade deal – even a relatively unambitious one.
Talks on the Rock | Spanish and British officials are discussing how to resume joint use of the British territory’s airport to ease the impact of Brexit and allow flights from the Rock to Madrid, Cadena Ser reported on Thursday.
Gibraltar is shaping up to be a sticking point in Brexit talks as a hard border between the territory and Spain will disrupt daily life and business for thousands of people.
Financing Hole | Britain’s expected withdrawal from the European Investment Bank due to Brexit “will leave a gap in financing the U.
,” EIB President Werner Hoyer said.
Demand for U.
projects has also declined because of the divorce, he said.
Ready to Go | Citigroup Inc.
 is planning to have its new broker-dealer group in Frankfurt up and running by year-end in case the U.
leaves the bloc without a transition agreement in place.
 “We assume that there will be no transition period so we have to be ready,” Citibank Europe Plc head Zdenek Turek told Bloomberg’s Gabriella Lovas in Vienna.
 The bank plans to relocate around 150 roles to the new hub.
Dutch Rebate | With Brexit bringing an end to the U.
’s infamous EU rebate, European Budget Commissioner Guenther Oettinger repeated on Thursday that it’s time to scrap a similar refund paid to the Netherlands.
Dutch Prime Minister Mark Rutte wants the overall budget to be reduced.
 With budget and Brexit talks running almost in parallel, the Dutch finance minister said earlier this week that the countries set to lose most from Brexit shouldn’t have to help plug the hole in EU spending left by the U.
So far the two negotiations are unconnected – but that may not last.
  Trump’s Reasons | U.
President Donald Trump is avoiding a visit to Britain because he wants to allow May to focus her attention on Brexit, Secretary of State Rex Tillerson said.
“As you know, President Trump was supportive of the U.
’s exit from the EU, he still thinks that was the right decision for them,” Tillerson said.
“Britain needs to focus on those Brexit negotiations right now, which is really important to them, and I think the president realizes that’s where Prime Minister May really needs to focus her attention.
” On the Markets | The pound is 13 percent stronger than it was a year ago, but there are still big risks of price swings depending on the outcome of Brexit, according to Trevor Greetham of Royal London Asset Management.
 “You’ve got these two possible outcomes and the market doesn’t know which one to believe in so it’s stuck right in the middle,” he told Bloomberg Television.
“You could see the pound go up or down by 10-15 percent, depending on what the final agreement is.
A karate black belt and a decade’s worth of experience poring over European Union law may not be enough to help one of Britain’s top EU officials fight her way out of Brexit limbo, writes Stephanie Bodoni.
Eleanor Sharpston, one of a handful of legal advisers to the bloc’s highest court, is in the dark as to whether she’ll be able to keep her job after Brexit.
While Britain’s two judges at the Luxembourg-based Court of Justice of the EU seem likely to be turfed out, Sharpston’s position is more nuanced because the bloc’s treaty leaves it open whether she will have to leave her post once the U.
“What are the conclusions that will be drawn, I suspect may be more influenced by politics than law,” Sharpston said in an interview.
But even the politicians don’t know yet.
  For more on Brexit follow Bloomberg on Twitter, Facebook and Instagram.
President Donald Trump and Republican leaders in Congress are racing to meet a midnight Friday deadline to pass a short-term spending bill to keep the U.
government open and prevent agencies from shutting down.
During government shutdowns, employees in all three branches of government are vulnerable to furlough, or temporary unpaid leave.
Other "essential" workers, including those dealing with public safety and national security, continue working, some with and others without pay.
After previous government shutdowns, Congress passed measures to ensure that essential and nonessential employees received retroactive pay.
The last government shutdown in October 2013 lasted more than two weeks and more than 800,000 federal employees were furloughed.
Here is a sampling of what happened, based on previous Reuters reports and government sources: NATIONAL PARKS: National parks closed and overnight visitors were given two days to depart, resulting in a loss of 750,000 daily visitors, according to the nonprofit National Parks Conservation Association.
The National Park Service estimated that the shutdown resulted in $500 million in lost visitor spending in areas surrounding parks and the Smithsonian museums.
WASHINGTON TOURIST SIGHTS: Popular tourist destinations such as the Smithsonian closed, with barricades going up at the Lincoln Memorial, the Library of Congress and the National Archives.
The National Zoo closed to visitors and its popular "Panda Cam" went dark shortly after the birth of a much-watched cub.
TAXES: The Internal Revenue Service furloughed 90 percent of its staff, according the liberal Center for American Progress.
About $4 billion in tax refunds were delayed as a result, according to the Office of Management and Budget, or OMB.
MAIL DELIVERY: Deliveries continued as usual because the U.
Postal Service receives no tax dollars for day-to-day operations and relies on income from stamps and other fees.
TRAVEL: Air and rail travelers did not feel a big impact because security officers and air traffic controllers remained at work.
Passport processing continued with some delays, as operations are funded by both fees and money appropriated by Congress.
COURTS: Federal courts, including the Supreme Court, remained open.
The Administrative Office of the U.
Courts has said federal courts could continue to operate normally for about three weeks without additional funding.
HEALTHCARE: Sign-ups for the newly created Obamacare health insurance exchanges began as scheduled.
The Medicare health insurance program for the elderly also continued largely without disruption.
A program at the U.
Centers for Disease Control and Prevention to track flu outbreaks was temporarily halted.
Hundreds of patients could not enroll in National Institutes of Health clinical trials, according to the OMB.
CHILDREN: Six Head Start programs operating in Alabama, Connecticut, Florida, Georgia, Mississippi and South Carolina serving about 6,300 children shut for nine days before reopening with money provided by philanthropists, according to the OMB.
SOCIAL SECURITY: Social Security and disability checks were issued with no change in payment dates and field offices remained open but offered limited services.
There were delays in the review process for new applicants.
MILITARY: All military personnel continued on normal duty status but about half of the Defense Department`s 800,000 civilian employees were placed on unpaid leave.
Nearly all were recalled one week into the shutdown after the Defense Department implemented the Pay Our Military Act, which had recently been passed by Congress.
LOANS: The processing of mortgages and other loans was delayed when lenders could not access government services such as income and Social Security number verification.
The Small Business Administration was unable to process about 700 applications for $140 million in loans until the shutdown ended, according to the Congressional Budget Office.
VETERANS: Department of Veterans Affairs services continued, including the operation of VA hospitals.
FOOD INSPECTIONS: Department of Agriculture meat inspectors stayed on the job.
Agricultural statistical reports ceased publication.
The USDA`s website went dark and linked to a page explaining the shutdown.
Pope Francis has arrived in Peru on the final leg of a two-nation trip to South America.
He was met at Lima airport by Peruvian President Pedro Pablo Kuczynski, who appealed to the pontiff to help resolve a continuing political crisis.
Peruvians have been protesting against the authorities` decision to pardon former President Alberto Fujimori.
The Pope arrived from Chile, where he met victims of sexual abuse by priests in the country.
The 81-year-old Argentine pontiff said he felt "pain and shame" over the scandal, asking the victims for forgiveness.
He has been criticised in Chile for a decision to ordain a bishop accused of covering up sexual abuse by a priest.
Pope Francis landed in the Peruvian capital on Thursday.
Before his arrival, President Kuczynski called the pontiff a "messenger of peace and hope".
He said he hoped the Pope`s visit would help to heal the nation.
The protests in Peru began after Mr Kuczynski pardoned the former president on health grounds on Christmas Eve.
Mr Kuczynski later acknowledged the anger at his decision but said he could not "allow Alberto Fujimori to die in prison".
Fujimori, who was serving 25 years for human rights abuses and corruption, has low blood pressure and an irregular heartbeat.
In Peru, Pope Francis will visit the cities of Puerto Maldonado and Trujillo, before holding a Mass in Lima on Sunday.