Germany's SPD Leader Backs Talks with Merkel on Political Impasse

Germany's Merkel will enter talks with Bavarian ally, SPD to find coalition partner: official

Firmly denying that an agreement had been reached on opening negotiations on a grand right-left coalition, Schulz said that all options remained on the table.

After his party's disastrous result in the September 24 election Schultz had ruled out forming another so-called grand coalition with Merkel's Christian Democratic Union and Bavarian-only sister party, the Christian Social Union, like the one that has governed Germany for the last four years.

Schulz's statement came the day after he met with conservative Chancellor Angela Merkel, Bavarian conservative leader Horst Seehofer and German President Frank Walter Steinmeier to discuss the possibilities for a new German government.

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The SPD, which saw its participation in a Merkel-led coalition government from 2013-17 rewarded with its worst election result in German post-war history, had been strongly opposed to another "grand coalition". "This is simply wrong", Schulz said, adding that the report appeared to be based on sources within Merkel's conservative CDU/CSU bloc. "That's exactly what I will propose to the party leadership on Monday", Schulz said.

He added that whoever circulated such reports was damaging trust.

On Friday, her party reiterated that stance, with the CDU's Klaus Schueler saying after a telephone conference of the party leadership: "The CDU is ready to hold serious talks with the SPD to build a stable government".

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"Berlin can not perpetually answer suggestions from the French president with a no", he said.

"The way for a grand coalition has been paved", Mohring told Reuters after taking part in a teleconference where Merkel had briefed the federal board of her Christian Democratic Union (CDU) on Thursday night's talks with Schulz and the president.

At the same time, the SPD chief began naming his conditions, stressing in particular that he wants Germany to back French President Emmanuel Macron's initiative to reform the European Union.

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Schulz said a grand coalition was "not automatic" and that the SPD party convention would also discuss other alternatives.

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