As Germany's two main parties have agreed to start formal coalition talks, the wishlist of costly policy changes is long. Economist Michael Burda believes though, the new government has enough fiscal room to maneuver.
The president announced the meeting with the leaders of Germany's two biggest parties as the country enters a second month without a new government. The SPD has been reluctant to form another coalition with the CDU.
The German press was virtually unanimous that Christian Lindner's FDP was to blame for the collapse of government coalition talks. But few could agree on what would be best now.
German Chancellor Angela Merkel has held talks with SPD head Martin Schulz in an effort to break the country's political deadlock. SPD politicians have said there's no hurry to agree to another grand coalition.
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