Germany election: Right-left 'grand coalition' beckons

Angela Merkel and her CSU allies (from left) Horst Seehofer and Peter Ramsauer leave talks with the SPD in Berlin, 17 October
Image caption Smiles on the right: Angela Merkel and allies from the CSU leave talks with the SPD in Berlin

A grand coalition between Germany's centre-right and centre-left parties has moved a step nearer, nearly a month after the general election.

The leaders of Chancellor Angela Merkel's Christian Democrats (CDU) and the opposition Social Democrats (SPD) have agreed on formal negotiations.

They reached agreement at a third round of exploratory talks in Berlin.

CDU leaders seem to have softened their opposition to a national minimum wage, a concession to the SPD.

Some of the negotiating will be over who gets which ministry, the BBC's Steve Evans reports from the German capital.

If the SPD take charge of finance, the departure of current minister Wolfgang Schaeuble may mean a softening of German economic policy.

Forming a new German government can be a long and difficult process but all the signs now point to a grand coalition, our correspondent says.

The CDU, along with its Bavarian sister party the CSU, fell just short of an outright majority at the polls on 22 September.

The CDU/CSU took about 41.5% of the vote, the SPD won 26%, the former communist Left Party 8.6% and the Greens 8.4%.

Germany is the EU's most populous country and has its biggest economy, making it a pivotal member of the eurozone.

'Enough common ground'

"At the end of the third round of exploratory talks we are convinced that we can find sensible solutions for both sides, and most of all for the country, even on disputed questions," SPD chairman Sigmar Gabriel said.

"The conservatives know... that a nationwide minimum wage of 8.5 euros [£7.2; $11.5]... is one of the central tasks and without this a coalition would not make sense for the SPD. That was no big surprise for the CDU/CSU."

CDU secretary general Hermann Groehe said: "We have a joint goal of seeing a sensible minimum wage ruling - I am sure we will find a result but we didn't discuss it today."

"In the three exploratory sessions it became clear that with regards to identifying the most pressing political tasks facing Germany over the next four years and how to deal with these, we can find enough common ground to rule this country successfully," he said.

The chairman of the CSU, Horst Seehofer, said the paramount issue for him remained "no tax increases and no new debt", according to the Munich daily Sueddeutsche Zeitung.

Mrs Merkel's previous coalition ally, the Free Democrats, failed to win any seats so the two-term chancellor set about seeking a new partner.

Talks with the Greens ended in failure on Wednesday and both of the big parties have ruled out a coalition with the Left Party.

As well as the proposed minimum wage, taxation will also be a key issue for the talks.

The SPD has not won an election since 2002 and it joined a previous grand coalition under Mrs Merkel in 2005.

One final hurdle for the coalition deal will be a vote by SPD party members, promised by the party leadership, on whether to endorse it.