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Merkel's exploratory talks on new German government enter critical phase

German Chancellor Angela Merkel's drive to find a coalition partner continues this week, as Europe waits for clarity in its largest economy. Exploratory were held Monday with the Social Democrats.

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Conservatives, SPD meet for crunch talks

Merkel and other members of her conservative bloc met with the main opposition Social Democrats on Monday. It was the second rounds of talks with both parties, seeking to find common ground for a possible coalition government. A third round of talks reportedly may take place Thursday.

Merkel's Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), emerged as the strongest force from September 22 elections, but lack a majority in the lower house, the Bundestag, having won 311 of the 631 seats.

Her coalition partner from the last government, the business-friendly Free Democrats, did not receive enough votes this time round to be represented in parliament.

Preliminary talks last week with both the SPD and the pro-environment Greens failed to produce any decision. Further talks were scheduled with the Greens on Tuesday.

Many members of the SPD, which is widely seen as Merkel's most likely ally, are unwilling to form part of a so-called "grand coalition" amid memories of seeing support for their party crumble after being the junior partner to the CDU/CSU from 2005-2009. After that alliance, the SPD recorded its worst post-war election result in 2009.

Controversial issues

Sticking points between the CDU/CSU and the SPD also remain the question of a nation-wide minimum wage, which the Social Democrats on Sunday made a precondition for coalition talks. The CDU/CSU rejects this, as well as SPD demands for higher income taxes on the wealthy.

An opinion poll by state broadcaster ARD last week showed 66 per cent of respondents supporting a grand coalition government. A coalition with the SPD would not only provide Merkel with a majority in the Bundestag, but would also strengthen her hand in the Bundesrat, the upper house, which is at present controlled by the opposition parties.

A CDU/CSU-Greens coalition is seen as less likely, partly because the CSU largely opposes the idea, but also because of wide differences on such issues as clean energy and refugee policy.

Talks on forming a new government could take until December. If Merkel fails to find a coalition partner, she may be forced to press for snap elections, having already ruled out heading a minority government.

Germany's European partners are anxious for negotiations in the EU's strongest economy to end, fearing they could delay decisions on measures to fight the eurozone crisis, such as a plan for banking union.

tj/kms (Reuters, dpa)

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