Berlin: German Chancellor Angela Merkel's conservatives and Social Democrats (SPD) worked through the night on Thursday to resolve differences on taxes, migration and other issues blocking formation of a new "grand coalition" government.
Negotiators had vowed to decide by Friday whether to launch formal coalition talks, but no agreement was in sight around 5:30 a.m., after more than 20 hours of discussions.
"It's still going to take a while," Bavarian conservative Stephan Mayer said as he left the talks at SPD headquarters.
Earlier, one participant told the mass-circulation Bild newspaper: "The negotiations are completely stuck."
Merkel, known for her ability to wait out opponents in lengthy negotiations, is counting on the left-leaning SPD to renew the coalition that ruled for two of her three previous terms, after failing to strike a deal with two smaller parties.
After weathering the euro crisis, the entry of more than a million migrants and more than 12 years in power, the German leader is scrambling to shore up her personal authority and end months of uncertainty that have started to sap the nation's international influence.
Should the parties fail to agree, Merkel could try to form a minority government, though she has said she favours new elections and would run as her party's top candidate in that case.
"TIME AFTER MERKEL"
Daniel Guenther, conservative premier of the northern state of Schleswig-Holstein, said his party and the German government still needed Merkel at the helm, but it was time to start building a succession plan.
"We need people in a new government that also have prospects for the time after Angela Merkel," Guenther told the Heilbronner Stimme newspaper.
Some progress was made during this week's exploratory talks, draft plans show, including pacts to cut use of the weed killer glyphosate, and drop a target of reducing carbon dioxide emissions by 40 percent by 2020 from 1990 levels.
Germany's flourishing economy, whose growth hit a six-year high in 2017, and the resulting record 38.4-billion-euro ($46.2 billion) public sector surplus, also offer negotiators a windfall to fund new programmes.
But the wish list presented by negotiators totals some 90 billion euros, about twice what they have estimated they can spend on new programmes, another source of conflict.
Some predicted the talks could drag on until 9 a.m.
One SPD negotiator told the Bild newspaper that Bavaria's CSU, sister party to Merkel's Christian Democrats, was blocking any agreement on raising tax rates for the wealthiest.
CSU leaders are pushing the conservative bloc to the right, worried about ceding further ground to the far-right Alternative for Germany (AfD) party in elections later this year.
After suffering its worst election result since 1993, the SPD wanted to stay in opposition, and agreed to consider another coalition with conservatives only under pressure from Steinmeier.
Political experts say new elections could bring further gains for the AfD, which entered the Bundestag lower house of parliament for the first time in September.
Kevin Kuehnert, head of the Jusos youth branch of the SPD, said he planned a 'NoGroKo' tour of Germany to persuade party delegates to vote against the grand coalition at a conference on Jan. 21.
He told broadcaster ARD late on Thursday he had folders of support messages from SPD members who wanted the party go back to its roots and focus more on helping the weakest in society.
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