Main sticking points in German coalition talks
German Chancellor Angela Merkel's conservatives and the centre-left Social Democrats agreed Thursday to launch formal talks to build a left-right "grand coalition" government.
However, ideological and policy differences stand in the way, which will force both sides to haggle and hammer out compromises.
The talks pit Merkel's Christian Democratic Union (CDU) and their Bavarian allies the CSU against the Social Democratic Party (SPD).
Here are the main areas of discord between Germany's two main political forces:
-- Investment and financing: whether to raise taxes or not
To fund badly needed investment in infrastructure, education and welfare, the SPD says 80 billion euros ($109 billion) must be spent per year, which it wants to finance with higher taxes for the rich.
Conservatives have pledged to resist this at a time of record-high tax revenues and say there is enough money in the public purse to finance state outlays.
SPD leader Sigmar Gabriel has said that a tax rise is "not an end in itself" if other solutions can be found.
The CSU, against CDU opposition, also wants to introduce highway tolls for foreign motorists.
-- Minimum wage
The SPD's central campaign promise was a national minimum wage of 8.50 euros ($11.5) per hour to help the growing army of working poor, a legacy of tough labour market reforms the Social Democrats themselves pushed through a decade ago.
Merkel says this would cost jobs and favours traditional negotiations between employers and unions that work out different wage deals by industrial sector and geographic region.
CSU chief Horst Seehofer has declared he may accept a minimum wage in return for no tax rises.
A compromise could be an in-principle agreement on a minimum wage, but with the level determined by a committee of unions and employers.
-- Family and social policy
The SPD wants to open more child-care centres to help working families and rejects as outdated and sexist a state benefit critics call the "stove bonus", for parents who care for toddlers at home.
The programme is a flagship policy of Bavaria's CSU, which wants to keep it.
The SPD also wants equal tax and adoption rights for same-sex couples and a women's quota in corporate boardrooms.
Seehofer signalled he may soften his opposition to another SPD demand -- allowing dual citizenship.
This would especially help the children of millions of Turkish and other immigrants who must now decide when they reach adulthood whether to take German or their ancestral citizenship.
-- Europe, foreign policy and energy
On foreign and eurozone policy, the big parties are much closer, and the SPD in opposition supported all of Merkel's major policy moves to combat the eurozone debt and economic crisis.
The SPD's candidate Peer Steinbrueck on the campaign trail called for greater solidarity with crisis-hit countries where youth unemployment has soared, and recalled that after World War II Germany received aid and debt forgiveness from its former foes.
However, on concrete measures, the parties basically agree to keep supporting recession-hit countries in return for economic reforms and to consent to a third bailout plan for Greece.
On Germany's ambitious energy transition away from nuclear power and toward renewables such as wind and solar, both sides agree that clean energy subsidies must be reduced to lower consumer electricity bills and have stayed sufficiently vague on details to leave the door open to compromise.
© 2013 AFP