Germany's SPD hints at greater solidarity with troubled EU states The way Germany's Social Democrats tell it, they are already changing Angela Merkel's European policies - even before they have formally taken their places in the planned coalition government. If, as expected, its members back the coalition in a party vote counted on Saturday, the SPD would replace the liberal Free Democrats as the junior partner to Ms Merkel's conservative Christian Democrats. Where the chancellor has spent much of the past three years resisting bailouts and pooling resources to fight fires in the eurozone, SPD officials say they are more open to the kind of "solidarity" with troubled EU economies frequently asked for by Brussels. That, they say, will mean a different kind of Germany at the EU's negotiating tables. "The FDP took a very strong national economic approach that starts from the view that economic affairs are to be ordered largely within Germany's borders," said Carsten Schneider, the SPD's budget spokesman in the Bundestag. We have a different policy. We support a fiscal union in the long run. Not only in banking but also in tax and spending policies. He added that, in this week's hard-fought deal on European banking union, the "acting finance minister" (a swipe at Wolfgang Schäuble) had weakened Germany's position through his "legally minded thinking," leading to a resolution mechanism that had become "overcomplicated" with a "diluted" bailing-in of creditors. In Brussels and Paris, such claims have raised expectations that on any number of issues - from a common EU rescue fund for European banks to the creation of a eurozone budget - Berlin will be more amenable to solutions Ms Merkel previously blocked. Some German analysts are sceptical. They argue the SPD's Europe policies are not radically different from the CDU's, nor is the Social Democrats" influence on Europe policies as great as they like to pretend. But they acknowledge that the SPD, with its decades-long backing of European integration, will be more pro-EU in its rhetoric than the Free Democrats and conservative parts of the CDU and its Bavarian sister party, the CSU. For example, when FDP and CDU firebrands suggested three years ago that Greece should sell a few of its islands to cut debt, no one from the SPD joined in. Analysts argue the party's Europhilia will be tempered by pledges to focus public spending on vote-winning domestic aims, such as pensions increases, and to remain close to the thrifty German public in its caution about foreign obligations. They are for EU solidarity but they want to use what money there is for their domestic audience. The urgent question now is how the SPD's newfound influence could affect the EU's planned banking union. Germany has been at loggerheads with Brussels and France over a planned EU-wide agency for winding up troubled banks and a EU fund for refinancing crisis-hit lenders. France has supported Brussels in calling for the European Commission to be the main bank executioner, with a single, centralised EU resolution fund. Germany, led by Mr Schäuble, has insisted the resolution authority be controlled by member states and the fund be composed of a network of national funds. A compromise emerged last week, with Germany giving some ground by agreeing to a commission-run resolution mechanism in which member states would have some rights to appeal. In an outline deal distributed to finance ministers on Tuesday night, the common rescue fund would be phased in over 10 years, with Mr Schäuble's network gradually mutualising its resources during the transition. Mr Schneider argues the shift came about at least in part thanks to pressure from the SPD during coalition talks, a view shared by some EU officials. "Our position is that fragmented national supervision and resolution arrangements contrast with today's multinational banks," Mr Schneider said. Wolfgang Schäuble doesn't see this is a problem. We do. Carsten Nickel, an analyst at risk consultancy Tenneo Intelligence, argues Mr Schäuble's shift was more down to the weak legal hand he held in arguing against a commission-run resolution. Also, with national elections behind him, he no longer had to worry so much about voters" concerns, said Mr Nickel. The differences between the SPD and CDU can be overstated. The two parties are in agreement in blaming bankers for the financial crisis and both insist on tough rules for forcing losses on bank investors - including shareholders and bondholders - before public money is used for rescues. But when EU governments are in financial trouble, the SPD stands ready to help, says Mr Schneider, though on this he adds "we are not so different from the CDU." He says the Social Democrats would have backed the recently-discussed precautionary credit line for Ireland, which Dublin turned down after pressure from Ms Merkel's government. As for Greece, the EU's biggest economic challenge, he says: "It's clear there will be another support programme, with conditions," noting it was the SPD that gave the chancellor critical support during the depths of the drisis in 2011-12. It would have been very popular in Germany if we had opposed the European programmes. We favoured the agreement because we had to be seen as supporting Europe. However, there are limits. The SPD this summer dropped controversial support for common eurozone-wide bonds because this was deemed unworkable and unpopular with voters. So is the SPD still the party of European solidarity? Yes, says Mr Schneider. We ultimately want political union as well as economic union. But, clearly, not at any price.