German politicians have achieved a breakthrough in talks aimed at forming a new coalition government, reported BBC News.
France said it too welcomed the deal struck between the German Chancellor and Social Democrat (SPD) rivals to open power-sharing talks and revive a "grand coalition".
"Even though these pre-coalition talks are meant more as a getting to know your partner, they really have become coalition talks", said Thomas Meyer, a political scientist at the University of Vienna, noting that final negotiations are increasingly based on the points hammered out during preliminary talks. Still, a ballot of his party's entire membership is required to bless the coalition agreement.
The first key date will be January 21, when around 600 party delegates will gather in Bonn to look at the outline deal obtained Friday. It was enough for leaders of Merkel's two-party Union bloc and the Social Democrats to recommend moving on to formal coalition negotiations.
"Together, we are determined to use Germany's strength, both economically and politically, to make Europe a grand project again", said Martin Schulz, leader of the SPD, at a news conference with Merkel after the marathon talks.
The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election.
The anti-immigration Alternative for Germany capitalised on voter anger over the issue to score 12.6% in the general election, a record for a far-right party in the post-war period.More news: Manhunt underway for suspected cop killer in Washington state
The document is expected to form the basis for formal coalition talks between the parties that could begin later this month if grassroots party members give a green light.
In the draft pact, announced on Friday, the parties agreed to limit the arrival of asylum seekers to around 200,000 a year, and to work with France to strengthen the Eurozone.
However, the Social Democrats have more leverage this time round.
The parties pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax. The SPD leader plans to tour local party chapters next week to sell the deal, while the SPD's youth organization plans protest rallies to lobby against it.
Though most European economies - and the euro - have been in good shape in recent months, the lack of German leadership was threatening to affect Brexit and stall the push for European Union reform, led most vocally by French president Emmanuel Macron.
"Government formation after the parliamentary vote in September is taking longer than we've ever seen in the federal republic", Frank-Walter Steinmeier, the German president, told foreign diplomats at a reception on Thursday night. "It is a significant, positive, forward-looking contribution to European policy debate in Europe", he added.
The two parties also stress Europe's role in peace and global responsibility in the document, clearly rejecting protectionism, isolationism and nationalism and calling for more worldwide cooperation.