Germany conservative Angela Merkel and Chancellor Gerhard Schroeder voiced optimism after talks today that their rival parties would resolve a row over who should lead the country and seal a deal to share power.
Following a two-and-a-half hour meeting that both parties described as exploratory, Ms Merkel sounded more positive on the prospects of forging a new government than she has since she narrowly edged Mr Schroeder in a September 18 election.
The vote left neither Ms Merkel's Christian Democrats (CDU) nor Mr Schroeder's Social Democrats (SPD) with enough votes to form a government with their preferred partners, forcing them into talks with each other.
"Overall I am more optimistic than pessimistic," Ms Merkel told reporters. "On the basis of substantive policy issues I am broadly positive that I can recommend my party enter serious coalition negotiations."
Mr Schroeder, speaking shortly after Ms Merkel, struck a positive tone. "The exploratory talks have shown that there is a basis for a grand coalition," he said.
The rhetoric from both parties contrasted sharply with the barbs they had exchanged ahead of the discussions. Ms Merkel's CDU had threatened to break off talks unless Mr Schroeder, who has refused to concede defeat, agreed to step down.
While this issue was not resolved in today's discussions, the comments suggested a breakthrough could come soon, with both parties pledging to hold another high-level meeting to clear up who would be Germany's next chancellor.
A source who attended today's meeting siad this second meeting, to be attended by Ms Merkel, Mr Schroeder, SPD chief Franz Muentefering and Christian Social Union (CSU) head Edmund Stoiber, would take place on Thursday evening.
"I got the signal from the SPD that there is a readiness for such a meeting," Ms Merkel said when asked whether the SPD had given any sign that Mr Schroeder could step down. "Overall I have the impression that there is a clear will by the SPD to ensure that coalition talks can start.