Chancellor Angela Merkel's conservative CDU/CSU bloc and Social Democrats (SPD) met for a fourth round of coalition talks Wednesday as they have stepped up efforts to crack a deal on a "grand coalition" government.
The country hit 108 days without an elected government after the parliamentary election on Sept. 24, the longest period since the the Second World War.
Peter Altmaier, a close aide of Chancellor Merkel, however, spoke cautiously, saying he expected tough negotiations.
"We still have a lot of work ahead of us," he told reporters before entering the headquarters of Christian Democratic Union (CDU), which hosted the fourth round of coalition talks.
SPD leader Martin Schulz said it would be a long night for the negotiation teams.
"I hope that we would make progress," he said, without elaborating on details.
The SPD and its potential partners, Merkel's Christian Democratic Union (CDU) and its sister party the Christian Social Union (CSU), were planning to conclude exploratory talks Thursday.
Local media reported that negotiation teams have so far reached agreement on several sensitive topics, including climate targets and drafting a law to attract skilled immigrants.
The Social Democrats are expected to hold an extraordinary party conference next week, and to decide whether or not to enter formal negotiations with the CDU/CSU on forming a "grand coalition" government.
Merkel's CDU/CSU alliance emerged as the largest bloc in the parliament Bundestag following September's federal election, but they failed to secure an absolute majority.
Schulz previously opposed a repetition of the "grand coalition" of the previous term, blaming it for his party's losses in the Sept. 24 election.
Both the SPD and CDU/CSU emerged weakened in September's poll, and many in the SPD have blamed their poor showing on the party's membership in the previous coalition.
Although Merkel's bloc is still the biggest group in the parliament, it needs the support of either the SPD, which is the second largest group in the Bundestag, or two smaller parties to form a government.
