Angela Merkel has said she is hopeful of forming a new government as she pressed on with coalition talks.
Merkel's future as German Chancellor looked uncertain towards the end of last year when negotiations between her CDU party, the FDP and the Greens broke down.
However, she is now in discussions with the Social Democrats (SPD), and is "optimistic" she can form a so-called "grand coalition".
Merkel said: "I am going into these talks with optimism, but it is clear to me that a huge amount of work lies ahead of us in the coming days.
"I think we can succeed."
Martin Schulz, SPD leader and former president of the European parliament, said he was "not drawing red lines" and was approaching negotiations with an open mind.
He said: "We want to implement as many red policies as possible in Germany. Germans are entitled to have this happen quickly."
Merkel was denied an overall majority in last year's election when the far-right Alternative for Germany party won 12.6 per cent of the vote, becoming the third-largest party in the German parliament.