The office of German President Frank-Walter Steinmeier confirmed on Friday that talks would be held between the leaders of Germany's main parties. The meeting, likely to take place on Monday or Tuesday, is set to bring together Christian Democrat (CDU) leader Merkel, Social Democrat (SPD) leader Martin Schulz and Horst Seehofer, the leader of Christian Social Union (CSU), the CDU's Bavarian sister party.

Steinmeier's announcement prompted speculation that Germany's two largest parties might be on the brink of forming another "grand coalition" after two months without a new government. Schulz later said that he would prefer to leave it to the normal party members to decide whether or not they wanted the SPD to be in power again — part of the SPD's larger bottom-up strategy to reinvent the party after its election trouncing.

The president confirmed that the meeting is due to the breakdown of preliminary coalition negotiations between the CDU, Green party and pro-business Free Democrats (FDP) last week after four weeks of discussion.

Coalition talks break down

After a disappointing result in the September 24 vote, Merkel's CDU was forced to approach the two smaller parties in order to form a majority government.

FDP leader Christian Lindner abruptly removed his party from the coalition talks on Sunday, because he said it was "better not to govern than to govern wrongly," adding that he did not feel that consensus between the three parties was possible. However, his earlier statements that he saw a "50/50 chance" of coalition talks succeeding, and his suspect timing of a press conference ahead of the last round of preliminary negotiations led many observers to label the move a transparent political gambit.

Merkel later commented that she would rather hold fresh elections than try to form an unstable minority government.

Mixed signals from the SPD

Party Secretary Hubertus Heil said that "the SPD will of course attend any discussions it is invited to" by the president, out of respect for the office. Usually a ceremonial post, the breakdown of coalition negotiations has seen former Foreign Minister Steinmeier break out his diplomatic toolkit once more, as he spent the week holding talks with party leaders in an attempt to build a consensus amid growing voter frustration at two months with a caretaker government.

"Talks don't mean there will automatically be a grand coalition," the Social Democrat leader of Rhineland-Palatinate state, Malu Dreyer, said ahead of the opening of Germany's upper house of parliament, the Bundesrat.