Merkel seeks to break German health reform deadlock

BERLIN, Oct 4 (Reuters) German Chancellor Angela Merkel stepped up pressure on critics of her healthcare reforms ahead of a meeting today designed to force a compromise among the grand coalition's bickering factions.

Conservative Merkel, who needs the boost of a significant domestic policy victory after 11 months in power, has been under pressure to rein in her own state premiers, who have opposed aspects of plans to overhaul the creaking system.

''At the end of the day, I carry the overall responsibility and ultimately I must say what goes,'' Merkel told Sat 1 television late yesterday.

Merkel will meet Social Democrat (SPD) leader Kurt Beck to hammer out a deal on the healthcare reform, after months of arguing between the conservatives and their SPD coalition partners over how to improve the way the system is funded.

The healthcare reform is needed in part to plug an expected 8.9 billion dollars shortfall in the fund this year, caused by spiralling costs and pressure on the system by the relatively high level of unemployment in recent years.

It has proved the most divisive issue so far for the grand coalition between left and right, the first between the main blocs since the 1960s.

The strongest opposition within the coalition has come from the Christian Social Union (CSU), the Bavarian sister party to Merkel's Christian Democrat Union (CDU), making Merkel appear weak in the eyes of the SPD.

Poll ratings for the CDU and the CSU are mired at their lowest levels since German reunification in 1990.

The government is unlikely to topple, however, mainly because there are no obvious alternatives to the current set-up.

Any agreement between the two party leaders is unlikely to silence critics of the proposed reform who say that the compromise falls far short of the changes required.

''The only area in which they agree is that they have to do something in order to save face,'' wrote Deutsche Bank chief economist Norbert Walter, a former adviser to ex-Chancellor Gerhard Schroeder.

''We do not need the healthcare reform as it being discussed at the moment.'' Reuters MS MIR RN1709