Germany's SPD denies agreeing coalition talks with Angela Merkel

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Schulz, Merkel and her Bavarian ally Horst Seehofer agreed to meet at Germany's presidential palace to explore the possibility of forming a so-called grand coalition like the one that makes up the outgoing government.

The CDU board had agreed that the party was ready to conduct "serious talks" with the SPD on the formation of a government. Such an alliance, between the country's two biggest parties, has ruled Germany for the last four years and remains in office in a caretaker capacity following September's general election.

Schulz insisted his party would continue to talk about all options, which could include tolerating a Merkel minority government, possibly in tandem with the Green party.

"I can clearly deny the media report about me having given the green light for grand coalition negotiations".

He said whoever circulated such reports was damaging trust.

He said that the SPD leadership's decisions early in the week would be presented to other party members during a meeting next Thursday and Friday for approval.

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In a sign of the ongoing friction between Schulz and Merkel's bloc that may make negotiations hard, he blamed the Bild report on a leak from her side and said he had telephoned her Friday to say it was "unacceptable".

FILE PHOTO: Acting Chancellor Angela Merkel attends a news conference at the Christian Democratic Union (CDU) headquarters in Berlin, Germany, November 27, 2017. We should talk about each of these options. Merkel has said in the past she does not want to lead a minority government.

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After the party convention of the SPD in the coming week, the CDU will discuss the way forward, according to Klaus Schueler, federal manager of the CDU. "The fact we underlined today that we are prepared to enter such talks with the SPD shows that we're aiming to bring these talks to a successful conclusion".

However, Schulz softened the stance on Friday as he said his party was willing to hold talks with the Union.

"A positive response to Emmanuel Macron will be a key demand in any negotiation with the SPD".

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