German candidates optimistic for coalition talks

BERLIN - German Chancellor Gerhard Schroeder and conservative leader Angela Merkel voiced optimism after talks to forge a power-sharing coalition on Wednesday despite disagreeing on who should lead the country.

"Constructive, serious," was the verdict of Merkel to reporters after meeting Schroeder and Social Democrat (SPD) chief Franz Muentefering.

"And when you think how we spoke with and against each other 14 days ago in the election campaign, I would have thought it almost impossible, but there is a great seriousness there to find a way as to whether we can forge a coalition together."

Schroeder expressed confidence that a power-sharing deal could be reached.

"I assume we can succeed and will succeed in forming a stable constellation that will keep Germany on its reform course for four years and continue this reform course and if necessary amend it," he said.

Germany's electorate voted Schroeder's SPD-Greens government out of office in a federal election on September 18, but failed to give the centre-right a majority, forcing Germany's two largest parties to discuss the possibility of governing together.

Merkel's Christian Democrats/Christian Social Union (CDU/CSU) and Schroeder's SPD have agreed to a third round of exploratory talks next Wednesday.

A chief stumbling block is the insistence of both Schroeder and Merkel that they should be chancellor. Preliminary results give Merkel's CDU/CSU three seats more than the SPD, an advantage the conservatives say is decisive.

"It's clear what stands between us. That is the demand of the Union on the chancellorship. But whoever had thought that there would be a step taken on this today, would have had false expectations," Merkel said.

Schroeder's hand has weakened slightly in recent days after SPD deputy chairman Kurt Beck said at the weekend he could not rule out a coalition without Schroeder at the helm, although other SPD chiefs have insisted there is no room for compromise.

CSU leader Edmund Stoiber, standing beside Merkel, said the conservatives and SPD should be able to form a "grand coalition" if Schroeder relinquished his claim to be Chancellor.

"If the SPD respects the unwritten rule of democracy that the strongest (parliamentary) group names the chancellor then, after today's talks which took place in a good atmosphere, I am confident we will also be able to agree on the key issues of substance," Stoiber said.

There was little talk of substance on Wednesday.

The party leaders said they had touched on issues such as the budget and social welfare reform, but had not gone into detail. The talks are officially only exploratory in nature to determine if there is enough common ground to form a government.

Some commentators believe the parties are awaiting the final result from a constituency in the eastern city of Dresden, even though it is not expected to change the balance of power. Voting there was postponed until Sunday after the death of a candidate.

- REUTERS