Merkel Germany: Delicate coalition talks begin

German Chancellor Angela Merkel arrives for talks with the SPD in Berlin, 4 October
Image caption Mrs Merkel, seen here going into the talks, led a coalition with the SPD in 2005

Talks on forming a new German coalition between Chancellor Angela Merkel's conservatives and their main leftist rivals are under way in Berlin.

Her Christian Democrats (CDU) fell just short of an outright majority at last month's polls, when their liberal partner won no seats at all.

Seven leading figures from the CDU are meeting seven counterparts from the Social Democrats (SPD).

The SPD is seen as their likeliest new partner despite sharp differences.

Also present at the talks are seven members of Mrs Merkel's Bavarian allies, the Christian Social Union.

Key issues are taxation and a proposed national minimum wage.

If a grand coalition is forged by the two main parties, like the one Mrs Merkel led in 2005, it faces the twin tasks of rebalancing the eurozone's biggest economy and winning the support of the German public to tackle the eurozone's debt and banking problems.

Image caption SPD party leader Sigmar Gabriel (centre) led his team into the talks

The SPD, which has not won an election since 2002, has said that any deal must be approved by its membership.

Keeping its options open, Mrs Merkel's party is also holding preliminary talks next week with the Greens.

At the election on 22 September, the CDU took about 41.5% of the vote, the SPD won 26%, the Greens 8.4%, and the former communist Left Party 8.6%.

The CDU's previous coalition partner, the Free Democrats, narrowly failed to cross the 5% threshold for entering parliament.