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Berlin – Conservative leader Angela Merkel and Chancellor Gerhard Schroeder failed Thursday to resolve their battle over who should lead Germany’s new government but agreed to meet again to explore forming a coalition to steer efforts to revive Europe’s largest economy.

Both Merkel and Schroeder have laid claim to building Germany’s next government after neither party won a clear majority in parliamentary elections Sunday, leaving the country, the world’s third-largest economy, in political crisis.

Merkel said Thursday’s talks took place “in a constructive atmosphere” but indicated her conservative Christian Democratic Union and its sister party, the Bavaria-only Christian Social Union, would not give ground on the issue of who should be chancellor.

Schroeder’s Social Democrats are holding out with their argument that German voters rejected Merkel as chancellor, awarding her party only 27.8 percent support after months of polling as much as 40 percent.

Coupled with the Christian Social Union, the conservatives reached 35.2 percent, just edging the Social Democrats, which won 34.3 percent.

Party head Franz Muentefering insisted the Social Democrats were seeking to build “a stable government for this country, as quickly as possible – a government led by Gerhard Schroeder.” At the same time, the Christian Democrats are pursuing the possibility of building a coalition with the Free Democrats – whom they met earlier Thursday – and the Greens, whom they are scheduled to meet today.

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