German Chancellor Angela Merkel on Sunday met with the chairman of her Bavarian sister party, Horst Seehofer, and Social Democratic (SPD) leader Martin Schulz at the start of preliminary coalition talks in Berlin.
As the negotiations got underway, Merkel acknowledged there was a lot of work ahead, but said she was "optimistic" the parties could work "very quickly" and "intensively" to reach an agreement.
Schulz said he hoped for "constructive and open" talks, adding that the SPD would not draw any red lines and that the German people deserved to see speedy progress.
Read more: Germany ends 2017 without a government for Angela Merkel
The talks come more than three months after Germany's federal elections in September last year. The vote saw all three parties lose considerable ground compared to 2013, with the far-right Alternative for Germany picking up most of the migrating voters.
A first attempt by Merkel's Christian Democratic Union (CDU) to form a ruling coalition government with the Free Democrats (FDP) and Green Party failed back in November, after FDP chief Christian Lindner walked away from the negotiating table.
Another coalition with the SPD therefore remains the only feasible option open to the chancellor, aside from the never-before-used option of a minority government. The Social Democrats know this all too well and might hope to drive a hard bargain despite their own weakened negotiating position.
Sunday's talks on the terms of a new "grand coalition" involve 39 negotiators (13 from each party), and will conclude with each party issuing a declaration outlining their key demands.
SPD demands
Schulz's decision to ultimately agree to launch preliminary talks with the conservative Union parties marks a major U-turn for the SPD leader. After picking up a historically low of 20.5 percent share of the vote in September, Schulz insisted his party would not enter into another four-year alliance with Merkel.
Now, however, the prospect of another four-year Merkel alliance has raised major concerns among the SPD's rank and file that the party could suffer even greater voter loss.
Ahead of the talks Schulz has focused heavily on three policies that are problematic for the CDU and especially their Bavarian Christian Social Union (CSU) allies: compulsory state health insurance for all, realizing a more "United States of Europe" and allowing the family members of refugees to join them in Germany.
The SPD is then set to vote at their party conference in Bonn on January 21 over whether preliminary talks with Merkel's conservatives should progress into formal negotiations.
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However, even then, Schulz has promised the SPD’s 440,000 members that they will be allowed to vote on whether or not the party should enter into another grand coalition.
Even if the path is then completely paved clear for a grand coalition, a new government is not expected to be formed before Easter.
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A history of Germany's coalition governments
CDU/CSU - FDP - DP (1949-1957)
The first democratic government to rule West Germany since the end of World War II saw Christian Democratic Union leader Konrad Adenauer form a governing coalition with the Free Democrats and the German Party (a now-defunct national conservative party). When Adenauer's conservatives won re-election four years later, he once again turned to the same coalition partners.
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A history of Germany's coalition governments
CDU/CSU - FDP (1961-1966)
After four years of ruling West Germany on their own between 1957 and 1961, the conservative Union lost their majority in the Bundestag and were forced to enter into coalition with the Free Democrats again. Adenauer resigned in 1963 for his part in the so-called "Spiegel" scandal. His Minister of Economic Affairs Ludwig Erhard (left) was elected by parliament to take over
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A history of Germany's coalition governments
CDU/CSU - SPD (1966-1969)
The first ever "grand coalition" was not the product of an election. Ludwig Erhart was re-elected in 1965 and continued to rule alongside the FDP. However, the following year the Free Democrats left the government over budget disputes. Erhart also resigned and Kurt Kiesinger (right) was chosen to take over. With the FDP out, he governed with the Social Democrats, led by Willy Brandt (left).
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A history of Germany's coalition governments
SPD - FDP (1969-1982)
Willy Brandt became Germany's first Social Democratic chancellor in the post-war period. Despite winning fewer votes than the CDU/CSU, Brandt struck a deal with the FDP to give them a narrow majority in the Bundestag. It wouldn't be the last time the liberals would be called out for a perceived lack of loyalty. In 1974, Brandt was replaced by Helmut Schimdt, who went on to win two more elections.
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A history of Germany's coalition governments
CDU/CSU - FDP (1982-1998)
The 13-year friendship between the SPD and FDP ended in 1980 as the two parties' differing ideologies became irreconcilable. The liberals again switched sides that year, dropping out of the coalition and seeking a deal with the conservatives. That caused the SPD-led government to collapse and a reborn CDU/CSU-FDP coalition formed under the leadership of Helmut Kohl (pictured).
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A history of Germany's coalition governments
CDU - DSU - Democratic Awakening (1990)
Shortly after the fall of the Berlin Wall, East Germany held its first ever elections. The Christian Democrats under Lothar de Maiziere took over 40 percent of the vote. They went into coalition with two small parties: German Social Union and Democratic Awakening, whose members included one Angela Merkel. In October that year, the government signed the reunification treaty with West Germany.
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A history of Germany's coalition governments
SPD - Green Party (1998-2005)
In 2002, Helmut Kohl's 16-year rule came to an end and the Social Democrats under Gerhard Schröder returned to power. The SPD formed a coalition with the Green party, who became a governing party less than 20 years after being founded. Unlike under Brandt, the SPD now led a left-wing government, rather than a center-left coalition. The SPD-Green party coalition remained in power until 2005.
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A history of Germany's coalition governments
CDU/CSU - SPD (2005-2009)
"Grand coalitions" do not come easily. When the first exit polls came in, both Schröder (right) and Angela Merkel (left) declared themselves the winner. In the end, Merkel's conservatives defeated the SPD by just 1 percent. Germany's two largest parties agreed to form the country's second-ever grand coalition.
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A history of Germany's coalition governments
CDU/CSU - FDP (2009-2013)
The "grand coalition" experiment ended in 2009, after the SPD picked up a disappointing 23 percent in the federal elections. The Free Democrats, by contrast, gained almost 5 percent to give them over 14 percent of the vote. Merkel and the FDP's Guido Westerwelle (left) formed a coalition with relative ease. It was, after all, Germany's 11th CDU/CSU-FDP government.
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A history of Germany's coalition governments
CDU/CSU - SPD (2013-?)
After taking more than 40 percent of the vote, Merkel's conservatives probably weren't expecting to rule with the SPD. But with her old allies the FDP failing to meet the 5 percent threshold to enter the Bundestag, options were limited. Merkel called on the SPD to join her and "take on the responsibility to build a stable government." She'd be making the same speech again four years later.
Author: David Martin
dm/tj (dpa, AFP)