Germany's Social Democratic Party leader Martin Schulz attends a news conference in Berlin on January 18, 2018. Hannibal Hanschke / Reuters

BERLIN—For Germany’s beleaguered Social Democrats (SPD), party unity seems to be in short supply these days. Following a turbulent, six-hour special conference at Bonn’s World Conference Center on Sunday to decide whether the SPD should enter a coalition with Chancellor Angela Merkel, delegates of the center-left party stood together to sing When We Stride Side by Side,” their traditional hymn. Appearances aside, however, this was no kumbaya moment.

Earlier that day, Martin Schulz, head of the SPD, had taken the stage to appeal to the more than 600 delegates in attendance to back an agreement he and his fellow party leaders had hashed out with Merkel’s conservative bloc, which is composed of the Christian Democrats (CDU) and Christian Social Union (CSU). Schulz assured his delegates that governing alongside Merkel gave them a chance to halt the wave of right-wing populism sweeping across Europe. Working with her, he said, they could deliver on some of their bread-and-butter platform positions on labor rights, pensions, taxes, and healthcare, too. “One percent of something is better than 100 percent of nothing,” he argued.

Schulz won, but not by much: By a count of 362 to 279, the SPD voted to enter formal negotiations to build a coalition government with Merkel’s conservatives.

Enthusiasm for Schulz’s message was lukewarm. After hours of fiery debate on Sunday, the wan and exhausted party leader appeared relieved as he congratulated the party’s top brass on an unexpectedly close victory. During a nearly hour-long address, his voice wavered at times (he was reportedly fighting a cold). In his call for a stronger Europe, his mention of a recent phone conversation with French President Emmanuel Macron came across as a thinly veiled namedrop, eliciting what sounded like a groan from the crowd.

When Schulz was named the SPD's candidate for chancellor in early 2017, he was hailed as a messiah, a leader fit to take down the seemingly unbeatable Merkel. But the rise of the populist far-right Alternative for Germany (AfD) and Merkel’s own strength brought the Social Democrats crashing back to earth instead. In September’s elections, they suffered their worst result in the post-war era. Schulz announced the SPD would not consider joining a government with Merkel, a promise he doubled down on after Merkel’s first attempt to form a coalition failed; he then reversed tack and backed coalition negotiations.

In December, Schulz sought his party’s endorsement to begin exploratory talks to enter a coalition with Merkel’s bloc. With his victory on Sunday, official talks can begin. But the entire SPD membership—around 440,000 people, according to the party—will still vote on the final coalition contract. There, too, the prospect of falling short is very real.

Four months have passed since Germany’s national election, and the country remains without a new government. The previous Merkel-led grand coalition has continued in a caretaker role, but with a new player to contend with: The AfD, which entered the Bundestag for the first time with 92 seats, has challenged the chancellor’s authority and shifted Germany’s political discourse to the right. With the populist presence in the Bundestag and the European Union looking to Berlin for leadership, Merkel’s conservatives insist they are taking time to ensure a lasting agreement with the SPD. This is the chancellor’s last chance to build a stable government. If she fails, she would be forced to build a minority government or face new elections.

The 28-page framework Merkel’s conservatives and Schulz’s Social Democrats drafted is intended to form the basis of a coalition government. On immigration, both sides agreed to cap the number of asylum seekers the country takes in to between 180,000 and 220,000 a year; before talks, the SPD had categorically rejected such a cap as a violation of the country’s moral obligation to protect refugees. Some asylum seekers with limited status will be able to bring their families to Germany, but this, too, will be restricted to up to 1,000 people a month. There would be no tax hike for the wealthiest Germans. The SPD also failed to establish what it calls a “citizen’s insurance,” a healthcare plan that guarantees the same standards for public and private patients in Germany.

There were some wins for the center-left, like a ban on exporting weapons to countries involved in Yemen’s ongoing war (German companies have been involved in lucrative arms deals with Saudi Arabia) and reforming the EU with a euro-zone budget and better protections against financial crises. After delegates voted on the framework agreement Sunday, Schulz promised to wrest further important concessions in the next stage of talks.

To keep the groundswell of resistance at bay, he’ll need to deliver. Many in the SPD blame their embarrassing election result on their last four years as the junior partner to Merkel’s conservatives. They say she has taken credit for their policies and successes. Working with her while also trying to reclaim their identity is the last thing on their minds.

The heated debate at the party conference on Sunday reflected the SPD’s unsavory position: If they reject a coalition, the political uncertainty continues; if they join a coalition, they risk losing more voters and creating the impression there really is no alternative to a grand coalition.

For the Jusos, the SPD’s youth wing, the latter option is political suicide. In December, it launched a vocal campaign against a coalition government under the hastag #NoGroko, or “no grand coalition,” whipping up support over the last two months in a bid to restore what they regard as their lost credibility. In the lead-up to Sunday’s conference, Kevin Kühnert, the leader of Jusos, became something of a media darling, trailed by a growing mass of cameras and reporters. After an ardent conservative in Merkel’s bloc called the grassroots resistance a “rebellion of the dwarves,” some of the SPD’s younger delegates donned gnome hats on Sunday. One speaker quoted the dwarf warrior Gimli from Lord of the Rings, quipping: “Certainty of death, small chance of success, what are we waiting for?”

Sunday’s divided outcome also revealed a deeper debate roiling the SPD. Metin Hakverdi, an SPD politician from Hamburg who supported coalition negotiations, said that the party must define what social democracy means in a globalized, 21st-century world. “Social democracy needs to make clear why it’s needed. That is the most important question, and it doesn’t necessarily have anything to do with the decision of whether to enter a coalition or not.”

Hakverdi said that renewing the SPD’s image will take time. In the near term, he said, it holds the key to breaking through Germany’s political stalemate. And contrary to the naysayers, things can be different this time around: Merkel doesn’t enjoy the same levels of support she once did after her own party’s poor showing in elections. Her right flank, still smarting from historic election losses to the AfD, is also vying to gain concessions. The CSU is facing a regional election in the fall, and is keen to show voters it, too, is tough on immigration. “Angela Merkel is by no means as strong and influential as she was four years ago. That counts internationally, in Europe, in Germany, and within her party, and that’s a big game-changer,” Hakverdi said.

Merkel, meanwhile, welcomed the SPD’s decision on Sunday evening, and acknowledged that “[t]here will of course be a multitude of questions to clear up in detail.” She has set a mid-February deadline for formal coalition negotiations, with a goal of ushering in a new government before Easter. Yet for a chancellor known for her ability to negotiate with everyone, she has been unable to find a truly willing partner.

Tarik Abou-Chadi, an assistant professor of political science at the University of Zurich and the Center for Democracy Studies Aarau, told me that smaller parties, especially the AfD, stand to gain from the current stalemate. “If you don’t have clear competition in the center, it’s good for the populists,” particularly with immigration so high on the agenda, he said.

If the grand coalition fails, the populists could point to the inability of centrist parties to achieve anything substantial. But if it succeeds, it could fuel the argument that nothing will change in Berlin, despite social upheaval over migration and globalization. The AfD would also gain important symbolic power as the largest opposition party. In parliamentary sessions, it would be the first to speak after the governing coalition, and it would chair parliamentary committees as well, possibly including the budgetary committee—the most important in the Bundestag.

Hakverdi said all this, too, can be overcome if the Social Democrats and conservatives realize their responsibility. “Whether they have the right to speak first in a debate or chair the budget committee, that’s not the real problem. Our problem is much bigger—to prove through action, commitment, and words, that we do represent the people.”

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.