German Social Democrat not ruling out any options for new government

No German 'grand coalition' yet: SPD's Schulz

Whether the SPD is prepared to go all the way towards a coalition agreement with Merkel remains unclear. Merkel is casting around for a coalition partner after her center-right bloc shed support to the far right in a September 24 election and her attempts to form a three-way tie-up with the pro-business Free Democrats (FDP) and the Greens failed.

After suffering its worst ever general election result, the SPD declared it would not reprise its role as junior partner to Merkel and wanted instead to rebuild in opposition. "This is simply wrong", Schulz said, adding that the report appeared to be based on sources within Merkel's conservative CDU/CSU bloc.

"Whoever circulates false reports destroys trust", he said. He had called the chancellor to complain about "inacceptable" leaks to the press, the Social Democrat leader said.

Firmly denying that an agreement had been reached on opening negotiations on a grand right-left coalition, Schulz said that all options remained on the table.

Relations between the SPD and conservatives - who are still sharing power in a caretaker capacity - soured this week after a conservative minister backed continued use of a weedkiller at the European Union level against the SPD's wishes.

Angela Merkel faces demands for sweeping European Union reform and further integration as the price of a new coalition government in Germany, it emerged on Friday. We should talk about each of these options. Schulz fronts a party which is split evenly down the middle on what he should do next. Her attempts to form a three-way tie-up with the pro-business Free Democratic party (FDP) and the Greens failed.

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"There was a broad consensus about not closing down any options concerning the formation of a new government", Schulz told reporters.

Merkel's party stressed however that was it was seeking is a renewal of its alliance with the SPD, to form a "stable government" for Europe's biggest economy.

Merkel's camp said the ball was in the SPD's court.

After the party convention of the SPD in the coming week, the CDU will discuss the way forward, according to Klaus Schueler, federal manager of the CDU.

The SPD executive will debate all options, a minority government or a grand coalition again with the Union.

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