Chancellor Angela Merkel said on Monday her party was ready to hold serious talks with the Social Democrats to form a government, warning that time is pressing as Europe faces a slew of challenges.
"Not only do we have diverse problems in Germany, but there are also great expectations in Europe for answers to pressing questions," Merkel told reporters after huddling with leaders of her Christian Democratic Union (CDU) in Berlin.
The German leader has been struggling to form a coalition after elections in September left her without a majority.
As the SPD refused initially to renew an alliance with Merkel's conservatives, the veteran chancellor had sought to partner up with the pro-business FDP and the ecologist Greens.
However, those talks collapsed, lurching Germany into a political crisis and raising the spectre of snap elections.
With the SPD now relenting, Merkel said there is "now an offer to talk, we mean it seriously."
Stressing the importance for Germany to have a stable government, Merkel said European partners like France were impatiently waiting for Berlin to "take a stance" on reform proposals for the bloc.
"Also given the conflicts in the Middle East, the situation with Russia, the situation in the United States, I think it would be good if Germany is capable of taking action," she said.
"And that's why we are ready to take on talks with the SPD. Just as we have undertaken exploratory talks that were serious, engaged and honest with the FDP and the Greens, we are ready to do the same with the Social Democrats," she said.
Nevertheless, Germany is unlikely to see a government for weeks, if not months.
Julia Kloeckner, deputy chief of Merkel's CDU, said formal negotiations with the SPD are unlikely to begin before 2018, after the labour party holds its congress next week, followed by the Christmas break.
A majority of Germans (52%) are in favour of a new grand coalition, known in German as the GroKo, according a survey published in the Sunday newspaper Bild am Sonntag.