Germany's Christian Democratic Union (CDU), the Christian Social Union (CSU) and the Social Democratic Party (SPD) have reached a breakthrough to begin official talks on coalition.
Germany's Chancellor Angela Merkel entered into talks with a rival party earlier this week in a last-ditch effort to form a government.
Merkel, who is battling to form a new government to salvage her political future, had warned that it would be a "tough day" of talks.
Acting German chancellor Angela Merkel moved one, tortuous step closer to a fourth term on Friday morning after all-night talks ended in preliminary agreement for a new grand coalition in Berlin.
Everything was at stake for Merkel and the other party leaders in the marathon talks. If Merkel succeeds at forming a coalition, the new government will likely be formalized after April.
Ahead of the talks, Schulz has focused heavily on three policies that are problematic for the CDU and especially their Bavarian Christian Social Union (CSU) allies: compulsory state health insurance for all, realizing a more "United States of Europe" and allowing the family members of refugees to join them in Germany.
Before they can proceed to formal talks, the SPD leadership needs to secure the agreement of a special party convention, scheduled for January 21.
The chancellor, who has won widespread respect overseas in more than 12 years in power, needs the coalition talks to succeed to avoid her personal authority being further undermined and Germany's global standing diminished.
"So I have no worries about us finding common solutions with France", she added.More news: Homicide suspect shot dead after he 'ambushed' officers at CMPD headquarters
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Many SPD members fear renewing the coalition would further weaken the party, which suffered its worst result in September's vote since the modern Federal Republic was founded in 1949. Her rapidly diminishing political stock threatens to leave a void not only in Germany but also across the West, just as she had emerged as the most robust internationalist counterpoint to Trump-style nativism.
"We have felt since the elections that the world will not wait for us, and in particular regarding Europe we are convinced we need a new call for Europe", Merkel, who has played a central role in tackling crises over the euro and refugees, told journalists after talks that had run through the night. But if those talks fail, then Merkel has two options, neither of which are ideal, said Anderson.
"We're not going to draw any lines in the sand, but we want to push through as many red policies in Germany as possible", Schulz said, referring to the representative color of his party. The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election.
The German parties' glacial place in setting up a new administration is testing the patience of voters who gave Merkel's Christian Democratic-led bloc the most votes in the September 24 contest.
Merkel's troubles started with a bitterly disappointing election result in September.
"We are working seriously ... on creating the conditions to be able to live well in Germany in 10 or 15 years", she said.
Members of her party sounded similarly upbeat on Monday.
Another poll, published by public broadcaster ARD, found that only 45% viewed a new GroKo positively, while 52% did not.
And a third survey, for business paper Handelsblatt, showed that 56 percent believed Merkel would not see out her four-year term.