Negotiations between the CDU/CSU bloc and the Social Democrats (SPD) saw significant progress on Sunday but the two parties were still "far apart" on several issues, SPD General Secretary Lars Klingbeil said.

It means German Chancellor Angela Merkel's conservatives and the SPD will miss their self-imposed soft deadline to forge a new government by Sunday. Talks are set to resume at 10 a.m. local time (0900 UTC) on Monday, with Tuesday also earmarked for further negotiations if necessary.

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"We've decided together that we won't have a night session tonight but rather that we will continue our negotiations and discussions in a detailed and focused way here in Willy Brandt House (the SPD's party headquarters) from 10 o'clock tomorrow," Klingbeil said.

The two main points of contention between the two sides concern health care and labor policy. 

The conservatives have squarely rejected SPD calls for sweeping changes to Germany's health insurance system, which would see the country's two-tier health care system replaced. Germany's current system is seen by many as unfair, since privately insured citizens tend to get better and preferential treatment. SPD leader Martin Schulz remains committed to securing a good deal for those with statutory health insurance that will also win the support of his party.

The SPD also wants to expand labor rights by giving employees the right to move between full-time and part-time work when caring for children or other relatives. The CDU and CSU are skeptical, saying the measure would be too costly.

Read more: Germany's divided SPD: the ultimate grand coalition decider

Despite their differences, CDU Deputy Chairman Thomas Strobl said he was convinced the two sides would find a compromise. "My guess is that things will go well," he told public television. "We need a bit more time... There are a dozen more points of contention. Things need to be clear, since we need a clear coalition agreement."

What the CDU/CSU and SPD agreed on Sunday

• The government will invest €4 billion ($4.97 billion) to boost social and private housing construction, with the goal of building 1.5 million new homes by 2021.
• Families with children will receive an additional €1,200 per child, per year over 10 years, with the money intended to go towards funding the children's future homes.
• Around €10 billion will go towards promoting high-speed broadband expansion, with the right to fast internet set to be enshrined in law by 2025.

 

dm/ng (dpa, AFP)