The chances for a new 'grand coalition' between German chancellor Angela Merkel's Christian Democratic Union (CDU) and the opposition Social Democrats (SPD) have improved following their exploratory talks here.
Both sides described the outcome of yesterday's three-hour discussions as "constructive" and agreed to meet again in ten days to explore forming a "grand coalition" government.
Seven members each from the CDU, its Bavarian sister-party Christian Social Union (CSU) and the SPD took part in the discussions.
They acknowledged that the first contacts between the two sides on forming a new coalition, since Merkel's centre-right party emerged dominant from the September 22 election, helped them to gauge their differences on key policy issues.
"The SPD and the conservative parties very often have similar priority areas, but they also have sharp differences," SPD chairman Sigmar Gabriel said.
"A grand coalition is still very much open as before. We are still in a warm-up phase and the game is yet to be kicked off," he said in a TV interview.
The CDU and the CSU finished five seats short of an absolute majority in the new Bundestag, the lower house of German Parliament. They had received 41.7 per cent of the votes.
The ruling coalition lost its majority after their junior partner, the liberal Free Democratic Party (FDP) failed to re-enter parliament by missing the minimum five per cent of the votes needed.
The SPD won 25.7 per cent of the votes and consolidated its position as the second largest faction in the Bundestag and is Merkel's preferred partner.
She formed a "grand coalition" during her first term in office between 2005 and 2009 and the Social Democrats' 192 seats in the newly-elected parliament can ensure her a solid majority and a third four-year term.
Merkel is keen to rope in the SPD as it will also give her control over the Bundesrat, representation of the 16 states, which is at present dominated by the opposition.
However, the SPD leadership is facing strong opposition from the party's grass-roots level. Many in the SPD fear that they will be eclipsed by the conservative bloc holding 311 seats and it will emerge much weaker from the coalition.
The SPD had earlier pledged to seek the approval of its 470,000 members before a coalition agreement is signed.
Merkel has the option to form a new coalition with the opposition Green party, which has 63 seats in the new Bundestag.
However, a large section of the CDU and CSU members are against a coalition, even though some hard-liners have shown willingness to talk with them after the ecological party's entire leadership stepped down soon after the election.
The CDU and the Green party are scheduled to hold exploratory talks on the possibility of forming their first coalition at the national level on October 10.
