German interior minister 'resigning in migration row with Merkel'

EURUSD Latest Euro Under Pressure From German Fallout Trade Wars

A almost eight-hour meeting of the CSU in Munich was put on hold after the party's leader, interior minister Horst Seehofer, made his offer to resign both from Mrs Merkel's Cabinet and as head of the CSU.

The dispute has raised the possibility of an end to Germany's decades-old conservative alliance between the CSU and Merkel's CDU if Seehofer goes ahead with the unilateral move, which could bring down her government.

A rift in the German government over mass migration showed no sign of resolution on Sunday evening as leaders of Chancellor Angela Merkel's party and its coalition partner met separately, each apparently waiting for the other to blink. The CDU's leaders, who are now gathered in Berlin for a second straight day of discussions, said they still see room for a compromise solution in the migration dispute.

Speaking at his party's annual gathering Sunday, Matteo Salvini, Italy's interior minister and leader of the anti-immigrant League party said he wanted to create a pan-European association of like-minded parties, Reuters reported, a further indication that nationalist forces are gaining strength.

After weeks of tension stoked by a Bavarian regional party that's threatening to send back more asylum seekers at the border, its leaders are meeting in Munich on Sunday to decide.

A document circulated by Merkel to coalition allies on Friday night outlined bilateral repatriation agreements with 16 countries and proposed reception centres in Germany where migrants would undergo an accelerated asylum procedure - measures that represent a significant hardening of her 2015 open-door asylum policy.

But the divisions within the German government over the issue are also being played out in other European Union countries, and this was reflected in the vague wording of Friday's deal.

Merkel's CDU relies on CSU to maintain power through a coalition, also including the Social Democrats (SPD), formed three months ago after an election in September. Seehofer has threatened to turn away certain categories of asylum-seekers at the country's borders, while Merkel insists on a solution that involves other European countries. But right-wing governments in Hungary and Poland have since said they have not reached any new deals on asylum.

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Should Seehofer resign and his party withdrawal from the coalition, it would spell the collapse of Merkel's government.

If Merkel holds firm and he does quit, the CSU could offer a replacement interior minister if it aims to remain tied to her party.

Top CSU lawmaker Markus Soeder, Bavaria's governor, on Saturday praised the European Union agreement as more than his party had expected, but at the same time suggested that it left open the possibility of unilateral national measures as well.

European agreements "will take a very long time" to take effect and there are uncertainties over which countries will join in, hardline Bavarian governor Markus Soeder said.

"We want to continue to reduce the number of migrants coming to Germany", she said.

The chancellor's frantic last-minute diplomacy was ultimately prompted by the CSU's fear of losing its cherished absolute majority in Bavaria's state parliament.

Seehofer and Merkel are in a dispute over Germany's asylum policy.

Opinion polls point to the AfD making a similarly spectacular entrance to Bavaria's parliament in October.

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