Berlin: The Bavarian sister party of German Chancellor Angela Merkel's Christian Democratic Union (CDU) has said they must agree policies on immigration limits, pensions and healthcare before opening coalition negotiations with two other parties.
Leaders of Bavaria's Christian Social Union (CSU) - stung by a drop in support of more than 10 per cent in the September 24 election - have redoubled their push for a 200,000 per year cap on immigration, a demand that Merkel has rejected, complicating her efforts to form a new government.
CSU leader Horst Seehofer said the conservative allies could not begin negotiating with the environmental Greens and pro-business Free Democrats (FDP) until the issues were resolved, the Sueddeutsche Zeitung newspaper reported on Monday.
It said the Bavarian premier, who is fending off calls for his own resignation, said the two parties faced their biggest challenge since 1976 - when his predecessor, Franz-Josef Strauss, threatened for weeks to break up the alliance.
Seehofer, whose biggest challenger is Bavarian finance minister Markus Soeder, a hardliner on immigration, will meet Merkel and other top officials on Sunday, the paper said.
The conflict inside the conservative camp is straining Merkel's already difficult task of bringing together parties with big differences on energy, Europe, migration and taxes.
Armin Laschet, premier of Germany's most populous region, North Rhine-Westphalia, said at the weekend that Merkel's CDU would not form a coalition at any cost, and that the Greens would have to step back from some of their demands.
"NEW START" Manfred Weber, deputy leader of the CSU and head of the centre-right group in the EU Parliament, told Deutschlandfunk radio it was important to avoid setting "red lines" before the coalition talks, given the urgent need to win back protest voters who backed the far-right Alternative for Germany (AfD).
Weber said he expected all mainstream parties to focus on preventing the anti-immigrant AfD from gaining a permanent foothold in the German parliament.
He said a three-way coalition among conservatives, Greens and the FDP - dubbed a 'Jamaica coalition' since the parties' colours match those of the Jamaican flag - offered a chance to build consensus on other issues such as energy and agriculture.
"Jamaica offers us a chance ... to embark on a new start," he said. "The CSU is ready to do that."
Merkel has sought to keep the door open for a renewal of her "grand coalition" with the Social Democrats that has ruled for the past four years, but the SPD is determined to stay in opposition after suffering its worst result since 1933.
"We got 20.5 per cent of the vote. That is not a mandate to govern," SPD Secretary General Hubertus Heil told broadcaster ARD on Monday.
He accused the other parties of stalling coalition talks until after a state election due on October 15 in Lower Saxony.
"They want to govern, now they should govern," he said.
A new poll by the Hannoversche Allgemeine Zeitung newspaper showed the CDU and SPD nearly tied in Lower Saxony, with 33.1 per cent and 32.8 percent, respectively.