Merkel's conservatives keen, but SPD still coy on German govt talks

Chancellor Angela Merkel's conservatives said they were willing to open formal talks on forming a government with Germany's Social Democrats (SPD) - but her chosen partner was expected to take two more days to decide how to proceed.

Weakened by heavy election losses to the far-right and then by the collapse last month of talks on a three-way alliance, Merkel is pinning her hopes on the SPD for a fourth term as chancellor and to avoid new elections.

Leaders of Merkel's Christian Democrats (CDU) and her Bavarian conservative allies (CSU) sought to persuade their SPD counterparts to drop their objections to a renewal of the "grand coalition" the two parties have been governing in since 2013.

"The CDU and CSU representatives made clear that they wanted to begin exploratory talks with the SPD on creating a stable government," the conservative camp said in a statement.

But an SPD official said the party first needed to hold consultations before announcing a decision today. After four years of governing with Merkel, the centre-left party scored its worst election result since 1933 - and few members want to repeat that experience.

Sensing that Merkel's lack of alternatives leaves it in a strong position, the SPD has said it would agree to share power only if it wins commitments on more generous social policy.

"A decisive point for the SPD is that the social agenda has more prominence in Germany," leading Social Democrat Carsten Schneider told German television ahead of the talks, demanding "fairness for ordinary heroes."

But the mood between the two parties is still sour and Merkel herself has been a frequent target of criticism by the Social Democrats.

The secrecy surrounding the talks underlined their sensitivity. With both sides having a lot to lose, the parties plan no public statements when talks conclude on Wednesday evening.

SPD leader Martin Schulz has made a pitch for EU integration leading to a "United States of Europe" by 2025, and the SPD wants a big spending boost on education, more nursery spots and a big healthcare reform. Merkel wants to maintain Germany's solid finances, cut some taxes and expand the digital infrastructure.