Political parties in Germany were close Saturday to an agreement on a new coalition government to be led by Chancellor Angela Merkel, but still had to settle some key policies.

Merkel’s Christian Democrats (CDU) and their Bavarian allies, the Christian Social Union (CSU), aim to form a government with the pro-business Free Democratic Party (FDP) which was previously in opposition.

In a key indication that a deal was close, the CSU announced a congress on October 26 to give the party’s blessing to the as-yet unsigned deal.

Merkel met FDPleader Guido Westerwelle and CSUleader Horst Seehofer in Berlin to discuss the remaining unsettled issues.

Juergen Ruettgers, premier of North Rhine Westphalia state and a vice-president of the CDU, said the 27 negotiators, nine from each of the three parties, believed a deal was within grasp.

A coalition accord is a key political document in the German political system, setting out in fine detail a four-year programme of legislative change and binding the government in its main policies.

“I don’t know anyone at the negotiations who is not certain that we’ll arrive at a shared solution to write a coalition accord,” Ruettgers said.

Among key policies firmly settled is a decision to extend the life of existing nuclear power stations, but the parties remain at odds about the scale of planned tax cuts and where to cut federal spending.

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