Exploratory coalition talks between Germany's major parties end ahead of crucial decision

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Chancellor Angela Merkel's conservative CDU/CSU bloc and Social Democrats (SPD) met for a fourth round of coalition talks yesterday, a day before both camps decide whether they want to move to formal negotiations on establishing a new government.

The SPD has scheduled a special national conference on January 21 in Bonn, where party members will vote whether to join the formal grand coalition talks.

"We Social Democrats, in our [leadership] committee, decided unanimously to recommend.to the party congress giving the party leadership a mandate to pursue coalition negotiations to form a government", Schulz said on Friday. The election in September saw the far-right Alternative for Germany (AfD) become the country's third largest party and enter the German Bundestag for the first time, unsettling the political establishment and many voters.

The draft suggests keeping the number of refugees coming to Germany within the range of 180,000-220,000 per year, according to German media.

However, the SPD's youth and left-wing factions have renewed calls that the SPD should not enter into another coalition with Merkel, which had made it suffer the landslide loss in federal elections.

"Many, many hours of work, serious wrangling and shaping are contained in these 28 pages", tweeted CDU lawmaker Julia Kloeckner, part of Merkel's negotiating team.

Merkel has already been politically weakened by leading the CDU-CSU to its worst election result since 1949, and by her failure in November to broker a coalition deal with the Greens and the pro-business Free Democrats (FDP).

Ms. Merkel's only other option is to rule as a minority government, which would mean building coalitions on the fly, behind every new piece of legislation, always worrying about an insurrection. Berlin's partners are awaiting a new government to help propel Brexit talks, euro zone reform and European Union diplomatic initiatives.

"What is crucial is that the final coalition agreement has a strong industrial-political core in order to make Germany internationally competitive for companies", Tillmann said.

However, beyond boosting Germany's EU budget contribution and transforming the European Stability Mechanism that can bailout member states into a European Monetary Fund, the blueprint is short of specifics on Europe.

In their joint blueprint, the three parties agreed on key policy outlines - to join European Union partner France in a push to "strengthen and reform" the 19-member eurozone, to limit the controversial influx of asylum seekers to Germany to around 200,000 a year, and to refrain from tax hikes given the healthy state of state coffers.

"So it's going to be a tough day", the chancellor said in a brief statement before joining leaders of the Social Democrats (SDP), along with her conservative Christian Democrats (CDU) and their Bavarian-based Christian Social Union (CSU) allies, for the exploratory round.

Interior Minister Thomas de Maiziere, Hesse state premier Volker Bouffier, both conservatives, and SPD deputy leader Ralf Stegner, relaxed by playing cards during a break in lower-level talks as the top tier of party leaders huddled together.

Immigration is a key issue in coalition talks. Many of Germany's worldwide allies congratulated Merkel and the other governing coalition leaders.

"If that doesn t happen, then Martin Schulz will have great difficulties.to convince party members of the necessity of this grand coalition", he said. And it's unclear whether Merkel would lead her party in another vote.

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