BERLIN (AP) — Chancellor Angela Merkel's conservatives and their traditional center-left rivals moved a decisive step closer to forming a new government on Thursday, but the alliance of Germany's two biggest parties is still far from a done deal.
Merkel's conservatives won a Sept. 22 parliamentary election, but their coalition partners of the past four years, the pro-business Free Democrats, lost all their seats. Short of an absolute majority, Merkel had to reach across the aisle for a new partner.
She now plans to start formal coalition talks on Wednesday with the Social Democrats, who finished a distant second in the election.
Merkel led a "grand coalition" with the Social Democrats in her first term, from 2005 to 2009. The center-left party doesn't have fond memories of the experience, which ended with a stinging election defeat four years ago, and is keen to extract a high price for repeating it.
Exploratory talks showed that the two sides "can develop sufficient common ground to be able to govern our country successfully for four years," Hermann Groehe, the general secretary of Merkel's Christian Democratic Union, said after the parties' leaders agreed to recommend formal coalition negotiations.
The Social Democrats' leader, Sigmar Gabriel, will now recommend to a convention on Sunday that the party enter formal coalition talks. Assuming the two sides reach a coalition deal, Gabriel has promised to seek approval for it in a ballot of his party's entire membership.
The Social Democrats have insisted on a mandatory national minimum wage of 8.50 euros ($11.60) per hour. Germany is one of the few Western countries not to have one; Merkel's bloc has advocated sector-by-sector and region-by-region deals on minimum pay.
Both sides "have the common aim of a sensible minimum wage arrangement," Groehe said.
The Social Democrats also have advocated tax increases for high earners, which the conservatives strongly reject — arguing they would hurt the economy.
Merkel's conservatives won 41.5 percent of the vote in last month's election but fell five seats short of a majority. The Social Democrats won 25.7 percent.
The smaller center-left Green Party decided this week against pursuing a coalition with Merkel.