German forge ahead with talks on new coalition government

Social Democrat leader Martin Schulz tweeted late in the afternoon that the sides had agreed upon measures to strengthen Europe, including more investment and greater resources to fight youth unemployment.

"We have now the real chance to improve Europe," he tweeted. "We should take this opportunity."

By Monday night, however, two points that are important to the Social Democrats still had not been worked out: curbing the use of temporary work contracts and trying to narrow differences between Germany's public and private health insurance systems.

Negotiators told the dpa news agency that party leaders had agreed to keep working later into the night, but to then break off and resume talks Tuesday. Even then the talks were expected to go long, with officials involved telling dpa that results of the coalition agreement might not be announced to the public until Wednesday.

Germany's effort to put together a governing coalition after its Sept. 24 election is already its longest since World War II.

It won't finish with these talks. A deal will have to be approved in a ballot of the Social Democrats' members, many of whom are skeptical after a disastrous election result. That process will take a few weeks.

Merkel's attempt to put together a government with two smaller parties collapsed in November. Schulz, who had previously ruled out renewing the "grand coalition" of Germany's biggest parties, then reversed course.

Failure to reach an agreement, or a deal's rejection by Social Democrat members, would leave a minority government under Merkel or a new election as the only viable governing options.