The German chancellor has signaled her party's "good will" to overcome differences in coalition talks. The SPD wants to expand labor and health care rights, but Merkel's conservatives view the measures as costly.
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German Chancellor Angela Merkel on Friday said there "is still a whole range of very serious differences" that must be overcome before forming a new government.
Merkel's Christian Democratic Union (CDU), the Bavarian Christian Social Union (CSU) and the Social Democratic Party (SPD) are locked in talks aimed at creating a "grand coalition" government after last year's inconclusive general election.
"I hope we will succeed but the problems are, as I said, not yet resolved," Merkel said. "We have good will to overcome them, but there is still a lot of work ahead of us."
One of the differences concerns labor policy. The SPD is seeking to expand labor rights by giving employees the right to move between full-time and part-time work in the event they must care for children or elderly parents.
However, the CDU and CSU have expressed reservations, saying it would be a costly measure.
SPD leader Martin Schulz said he would not allow a Sunday deadline to pressure him into accepting a hasty agreement that doesn't advance his party's agenda.
A yearly limit of between 180,000 to 220,000 migrants per year
Creation of 15,000 new police jobs split between the federal government and the 16 states
Ability to revoke German citizenship for people with dual nationality who are convicted of terrorism abroad
More money for clinics and doctors in rural areas
Expansion of Germany's charging infrastructure for electric cars
Gradual abolition of the air traffic tax
More financial aid for families with children
'Convinced'
Seehofer expressed optimism at the prospect of a new government formed by the three parties.
"I am convinced that we will manage to do it in the coming days," Seehofer said.
The CDU, CSU and SPD are set to resume talks on Saturday with an eye to concluding negotiations by Sunday.
The parties' leaders have agreed to a two-day grace period in the event they have yet to overcome key differences.
A history of Germany's coalition governments
Only once has federal Germany been ruled by a single party with a parliamentary majority. Coalitions are therefore the norm. DW looks at the various governing combinations that have presided in the Bundestag.
Image: Reuters
CDU/CSU - FDP - DP (1949-1957)
The first democratic government to rule West Germany since the end of World War II saw Christian Democratic Union leader Konrad Adenauer form a governing coalition with the Free Democrats and the German Party (a now-defunct national conservative party). When Adenauer's conservatives won re-election four years later, he once again turned to the same coalition partners.
Image: picture-alliance/Vack
CDU/CSU - FDP (1961-1966)
After four years of ruling West Germany on their own between 1957 and 1961, the conservative Union lost their majority in the Bundestag and were forced to enter into coalition with the Free Democrats again. Adenauer resigned in 1963 for his part in the so-called "Spiegel" scandal. His Minister of Economic Affairs Ludwig Erhard (left) was elected by parliament to take over
Image: picture-alliance/dpa
CDU/CSU - SPD (1966-1969)
The first ever "grand coalition" was not the product of an election. Ludwig Erhart was re-elected in 1965 and continued to rule alongside the FDP. However, the following year the Free Democrats left the government over budget disputes. Erhart also resigned and Kurt Kiesinger (right) was chosen to take over. With the FDP out, he governed with the Social Democrats, led by Willy Brandt (left).
Image: dpa
SPD - FDP (1969-1982)
Willy Brandt became Germany's first Social Democratic chancellor in the post-war period. Despite winning fewer votes than the CDU/CSU, Brandt struck a deal with the FDP to give them a narrow majority in the Bundestag. It wouldn't be the last time the liberals would be called out for a perceived lack of loyalty. In 1974, Brandt was replaced by Helmut Schimdt, who went on to win two more elections.
Image: picture-alliance/akg-images
CDU/CSU - FDP (1982-1998)
The 13-year friendship between the SPD and FDP ended in 1980 as the two parties' differing ideologies became irreconcilable. The liberals again switched sides that year, dropping out of the coalition and seeking a deal with the conservatives. That caused the SPD-led government to collapse and a reborn CDU/CSU-FDP coalition formed under the leadership of Helmut Kohl (pictured).
Image: AP
CDU - DSU - Democratic Awakening (1990)
Shortly after the fall of the Berlin Wall, East Germany held its first ever elections. The Christian Democrats under Lothar de Maiziere took over 40 percent of the vote. They went into coalition with two small parties: German Social Union and Democratic Awakening, whose members included one Angela Merkel. In October that year, the government signed the reunification treaty with West Germany.
Image: picture-alliance/dpa/Wolfgang Kumm
SPD - Green Party (1998-2005)
In 2002, Helmut Kohl's 16-year rule came to an end and the Social Democrats under Gerhard Schröder returned to power. The SPD formed a coalition with the Green party, who became a governing party less than 20 years after being founded. Unlike under Brandt, the SPD now led a left-wing government, rather than a center-left coalition. The SPD-Green party coalition remained in power until 2005.
Image: picture alliance/dpa/W. Baum
CDU/CSU - SPD (2005-2009)
"Grand coalitions" do not come easily. When the first exit polls came in, both Schröder (right) and Angela Merkel (left) declared themselves the winner. In the end, Merkel's conservatives defeated the SPD by just 1 percent. Germany's two largest parties agreed to form the country's second-ever grand coalition.
Image: picture-alliance/AP Photo/F. Bensch
CDU/CSU - FDP (2009-2013)
The "grand coalition" experiment ended in 2009, after the SPD picked up a disappointing 23 percent in the federal elections. The Free Democrats, by contrast, gained almost 5 percent to give them over 14 percent of the vote. Merkel and the FDP's Guido Westerwelle (left) formed a coalition with relative ease. It was, after all, Germany's 11th CDU/CSU-FDP government.
Image: Getty Images/A. Rentz
CDU/CSU - SPD (2013-?)
After taking more than 40 percent of the vote, Merkel's conservatives probably weren't expecting to rule with the SPD. But with her old allies the FDP failing to meet the 5 percent threshold to enter the Bundestag, options were limited. Merkel called on the SPD to join her and "take on the responsibility to build a stable government." She made the same speech again four years later.