BERLIN -- Exuding good will, Chancellor Angela Merkel's conservative bloc and its Social Democratic rivals agreed on Thursday to open formal negotiations next week on reviving the "grand coalition" that led Germany from 2005 to 2009 and which both sides suggested could now steer Europe's biggest economy into four more prosperous years.
After a third round of preliminary talks, it is clear that the rivals "will be able to reach agreement on a significant number of challenges facing Germany in the coming four years, to successfully govern our country," Ms. Merkel's campaign manager, Hermann Gröhe, told reporters.
The chaiman of the Social Democrats, Sigmar Gabriel, said he was also optimistic. The first round of formal talks will take place on Wednesday, a day after the new Parliament convenes.
By the glacial pace of Germany's consensus-driven politics, agreement followed swiftly after the Greens -- Ms. Merkel's only other potential coalition partners -- withdrew from negotiations early Wednesday, saying they could not see how a stable government could emerge with the conservatives.
Ms. Merkel's Christian Democrats and their sister party in Bavaria won handily in the Sept. 22 elections. But the victory, a personal triumph for the chancellor, left them five seats short of a majority, forcing the usual search for partners in government.
Analysts expect it to take several weeks actually to nail down a new coalition agreement -- which usually specifies in great detail what the new government wishes to achieve and how to do it.
Thursday's agreement came after an unexpected suggestion from Ms. Merkel's Bavarian partners that the conservatives could agree to a key Social Democratic demand -- for a minimum wage -- so long as the center-left committed to no new taxes.
"For me, the absolute top priority is no increase in taxes and no new debts," Horst Seehofer, the leader of the Christian Social Union in Bavaria, told the Munich-based Süddeutsche Zeitung.
The Social Democrats have insisted on a nationwide minimum wage of €8.50 an hour. The conservatives prefer negotiations between trade unions and leaders in each sphere of economic activity.
Some economists and the business lobby have suggested that a nationwide minimum wage would in fact lead companies to cut jobs, particularly in eastern Germany. Almost 24 years after the Berlin Wall came down, wages in the former Communist east are still lower than in the west.
On Wednesday, the Chancellor made her first policy speech since the election and also warned of the dangers that a minimum wage could pose for jobs. Germany has an unemployment rate of 5.2 percent, according to Eurostat in Brussels, compared with a 12 percent average among the 17 members of the European Union that use the euro.
In her speech, Ms. Merkel gave little hint of any change in policy toward Europe, but said that "Europe should emerge from its crisis stronger than when it went in to it," as she said Germany had after the 2008-9 financial crisis.
The election was fought largely on domestic issues, with the clearest differences between the two centrist groups emerging over the minimum wage, the definition of family in 21st-century Germany and what that means for everyone: working mothers, children of kindergarten age or gay couples seeking to adopt.
There is broad consensus that education and the creaking infrastructure of roads, railways and the Internet need attention, but there are differences over how to pay for the needed improvements. Health care, including particularly care for the aged, and pensions are other areas of differences which will now be pored over in detail by both camps.world
This article originally appeared in The New York Times. First Published October 17, 2013 2:01 PM