Merkel achieves breakthrough in German coalition deal

Berlin: German Chancellor Angela Merkel on Wednesday moved a step closer to forming a coalition government with her centre-left rivals, the Social Democratic Party (SPD), after four months of political uncertainty.

A spokesperson for the SPD confirmed it had reached a deal with Merkel's centre-right Christian Democratic Union (CDU), but stressed that it would need to be formally approved by the party's 460,000 members, reports CNN.

The announcement represents a huge breakthrough for Merkel, who has struggled to form a government since suffering embarrassment in September's election.

But the latest deal means that a return to the the so-called "grand coalition" between the CDU and SPD, which has been in power for the last 12 years, appears to be on the cards.

Such a move will also leave the right-wing Alternative for Germany (AfD) party as the man opposition in the German parliament.

The AfD's anti-immigration stance proved hugely popular with voters, winning 12.6 per cent of the vote, a result described by leading party figures as a "political earthquake".

On Tuesday, Merkel warned both sides needed to make "painful compromises", adding that she was ready to do so if they would benefit the country, reports Efe news.

The SPD leader, Martin Schulz, faces a struggle to convince the more militant factions within his party, including its youth wing known as "Jusos", to enter into a coalition with the centre-right ruling party.

Schulz hopes to convince the SPD's more sceptical members, who have the final say on whether to proceed with the coalition with the centre-right, by securing concessions on healthcare and employment.