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Merkel hints at forming govt next week

AFP, Berlin
German Chancellor Angela Merkel met the opposition Social Democrats' leader yesterday, ahead of a decision expected next week on her preferred governing partner for Europe's biggest economy.
A new poll showed a record two-thirds of Germans would favour a rerun of a left-right 'grand coalition' between the two big parties, Merkel's conservatives and the centre-left Social Democrats (SPD).
For now Merkel, whose centre-right CDU won the September 22 vote, is keeping her options open and has agreed to more talks early next week with both the SPD and the left-leaning and ecologist Greens.
In the end "the typically cautious Merkel will probably still prefer the tested combination with the SPD", with whom she governed in her first term, said an analysis by Berenberg Bank.
"We see an 80-percent probability for a grand coalition in Germany."
Senior economists at the bank cautioned that an SPD pledge to let its party base vote on any coalition deal "introduces an element of unreliability" and that "the readiness in Merkel's CDU (Christian Democratic Union) to do a deal with the Greens seems to be growing".
Almost three weeks after the election left Merkel without a clear majority, decision time is approaching for her CDU and its Bavarian allies the CSU.
They have said they want to know by October 22, one month after the election, with whom to launch serious coalition talks.
On Friday - a day after the conservatives held their first exploratory talks with the Greens, described as cordial by both sides despite many points of conflict -Merkel and CSU chief Horst Seehofer met quietly with SPD chief Sigmar Gabriel in the chancellery.
If a 'grand coalition' takes shape, the SPD has said it will push its core campaign demand fora national minimum wage to help the country's growing army of working poor - an idea supported by most Germans, according to a new poll.
While 35 percent support the SPD's call for an 8.50 euro ($11.5) hourly minimum wage, another 56 percent want one that is even higher, found the Infratest dimap poll for ARD public television.
The same survey found that 67 percent of Germans would back a 'grand coalition', while only 27 percent preferred an alliance of the conservatives and Greens, called a "black-green" coalition in Germany's colour-coded politics.
The Greens may narrow Merkel's options as early as Tuesday.