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JSE closes weaker as elusive Merkel coalition deal rattles global markets

German coalition teeters as minister offers to resign over migrants

German Chancellor Angela Merkel's conservatives settled a row over migration that threatened to topple her fragile governing coalition late on Monday evening after talks with her rebellious interior minister led him to drop his threat to resign.

Lars Klingbeil, secretary general of the center-left party, stopped short of rejecting the deal, but told the Rheinische Post newspaper: "Our resolution stands: We don't want closed camps".

Barley added that the coalition agreement, which does not include the introduction of special transit zones at the border, would form the basis for any government action.

Tighter German border controls have in the past raised fears of a migrant build-up in Austria.

In cases where no such bilateral agreements exist, the asylum seekers would be sent back across the border "on the basis of an agreement with Austria" that was to be negotiated, it said.

Seehofer said after talks with his party stretching into the small hours of yesterday morning that he would step down as minister and head of the Christian Social Union rather than acquiesce in the increasingly bitter standoff.

To politically survive, Merkel could attempt a minority government, seek a new coalition partner in the ecologist Greens or pro-business Free Democrats, or orchestrate a no-confidence vote in parliament that could trigger new elections.

Seehofer said on Tuesday that he had already discussed a possible solution with Kurz.

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Seehofer made no comment to reporters as he arrived at Monday's meeting in Berlin.

"Smugglers are exploiting the desperation of migrants to leave before there are further crackdowns on Mediterranean crossings by Europe", Othman Belbeisi, the IOM's Libya chief said.

Seehofer had been in a showdown with the German Chancellor, offering his resignation on Sunday in protest over Merkel's reluctance to accept his plans to reverse the country's generous policies towards migrants.

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.

Before the refugee crisis of 2015, Seehofer was mainly concerned with regional pet projects tolerated by Merkel, such as rewarding mothers who raise young children at home with state benefits and charging foreign motorists for using Germany's Autobahn.

However, there seems to be little appetite among Social Democrats leaders to oppose the plan this time and trigger another crisis.

In the first five months of this year, roughly 4,600 "unauthorized entries" were recorded at Germany's border with Austria, according to the German police.

Public anger and fear about the newcomers has given rise to the far-right, anti-Islam Alternative for Germany (AfD) party, which entered parliament a year ago and threatens Seehofer's CSU in Bavarian state polls in October. About 18,000 had already applied for asylum in another European Union country.

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