Schroeder, Merkel prepare for first talks on future German government

Gerhard Schroeder and Angela Merkel were preparing for their first face-to-face talks Thursday on their rival claims to lead Germany after its inconclusive election.

Opposition leader Merkel's conservatives narrowly beat Chancellor Schroeder's Social Democrats in Sunday's parliamentary vote and ended his seven-year coalition with the environmentalist Greens.

But the margin of victory was so narrow that Schroeder has refused to acknowledge defeat, insisting he should remain as chancellor to manage reforms that have so far failed to fire up Europe's largest economy.

With both major parties unable so far to muster enough support from smaller groups to form a majority, leaders have insisted ahead of Thursday's talks that they will look seriously at joining up in a "grand coalition," reports the AP.