Schroeder, Merkel to Discuss Stalemate

Chancellor Gerhard Schroeder (search) and challenger Angela Merkel said Wednesday they will hold a meeting to discuss who will be Germany's next leader following last month's inconclusive elections.

A third round of talks Wednesday between the two sides had shown that "there is a basis" for a coalition between Germany's (search) two biggest parties to resolve the country's political stalemate, Schroeder said.

The planned meeting would be held "very, very soon," Schroeder said, but neither he nor Merkel would give a date.

Merkel said she was "more optimistic than pessimistic" after the talks with Schroeder and other leading Social Democrats (search), which she said had gone "very successfully."

Heading into the session, the two sides had been divided by Merkel's insistence that Schroeder's party back off its claim to keep him as chancellor before the two parties can open talks on forming a so-called "grand coalition."

"We have agreed that to clear up the question, particularly the personnel question, the workings of a government and possibly some questions on content — there will be another summit," Merkel told reporters.

"This summit will clear up if it is possible to begin coalition negotiations," she said. "We have determined that we have a basis in terms of content."

Neither Schroeder nor Merkel won a majority for their preferred coalition in the Sept. 18 election, although Merkel's Christian Democrats and their Bavaria-only sister party, the Christian Social Union, came away with the most seats in parliament. They have 226 seats to 222 for Schroeder's Social Democrats in the 614-seat Bundestag lower house, with 308 needed to form a government.

Both major parties were due to hold leadership meetings Thursday.

Failure to end the deadlock could leave Germany with a weak minority government at a time when many are calling for potentially unpopular action to fix the economy — or more turmoil through new elections. Both parties publicly oppose that, saying Germany needs stable leadership quickly to tackle its high unemployment, sluggish growth and budget deficits and provide leadership in the European Union.

Parliament must convene by Oct. 18. If it cannot choose a chancellor in three rounds of secret-ballot voting, President Horst Koehler can name the candidate with the most votes to head a minority government — or dissolve parliament for another election campaign.