Chancellor Angela Merkel and Social Democrat chief Martin Schulz said Friday they are ready to start talks on ending Germany's political deadlock, although they may not share the same idea on what shape any future cooperation would take.

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.

Merkel's conservative 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.

After September's election left the veteran leader without a majority and the SPD with a historic low score, the labour party rejected ruling again in Merkel's shadow.

But it came under pressure to relent and head off fresh elections after Merkel's bid to form a coalition with the ecologist Greens and pro-business FDP fell apart last month.

Following first talks with Merkel late Thursday, Schulz said he would recommend that the SPD begin formal discussions with her CDU party but firmly denied a media report this meant he was committing to joining a new government.

- 'A different Europe' -

Schulz said he had telephoned Merkel to say that any such claims from her conservatives to the media would be viewed as "a breach of trust".

"We have several options for forming a government," he said. "We should discuss all of these options and that is what I will recommend to the party leadership Monday."

The SPD's top brass will then present their recommendation to party rank and file during their congress from Thursday.

"It doesn't automatically mean a grand coalition, we have time and we will also discuss other possible options during the SPD party congress," said Schulz.

At the same time, the SPD chief began naming his conditions, stressing in particular that he wants Germany to back French President Emmanuel Macron's initiative to reform the European Union.

"We need a different Europe and the initiatives that the French president has suggested should not be given a 'no' from Berlin or left unanswered," he said, referring to Macron's ideas of creating a new eurozone finance minister position and giving the 19-member zone its own budget.

- 'Fierce opposition' -

The meeting of the SPD rank and file next Thursday will be a key date as Germany anxiously awaits signs of its next government.

Ahead of the congress, which will also decide whether to re-elect Schulz as SDP chief, the party's top brass has been careful to tread softly regarding its options.

A rebellion is already brewing over entering into a new grand coalition, known as "GroKo" in German.

Leading the opposition is the SPD youth wing, which on Friday launched an internet campaign with a motto "#NoGroKo -- for a clear and credible SPD".

By mid-day on Friday, some 3,400 people have already signed up on the #NoGroKo petition.

"If motions for the formation of a grand coalition are filed at the party congress, they will be met with our fierce opposition," the youth-wing's chief Kevin Kuehnert vowed in an interview with the RND newspaper group.

"If necessary, we will put in a motion to rule out a grand coalition," he said.

Other possible options for the SPD include backing a minority government led by Merkel, and Schulz himself had sent a tweet saying that "it is possible that the country ends up with a constellation that it has never seen in its (post-war) history".

But that is something Merkel is hoping to avoid.

On Friday, her party reiterated that stance, with the CDU's Klaus Schueler saying after a telephone conference of the party leadership: "The CDU is ready to hold serious talks with the SPD to build a stable government."

Source: AFP