German Chancellor Angela Merkel's Conservative Union and Martin Schulz's Social Democratic Party (SPD) on Sunday kicked off a week-long exploratory talks for a renewed grand coalition government.

Merkel, Schulz, and Horst Seehofer, leader of the Christian Socialist Union (CSU), and some other leading figures of the three parties, 13 for each party, joined the talks at Willy Brandt Haus, SPD's headquarters.

"I think that it can be done. We will work very swiftly and very intensively," she told journalists before the meeting, saying that she acknowledged there was a lot of work ahead, but she was "optimistic" that an agreement could be reached.

For his part, Schulz said he hoped for "constructive and open" talks, calling for speedy progress of the government formation.

Germany has no new government since the Sept. 24 federal elections last year, in which both the Union and the SPD suffered great loss in votes while far-right populist Alternative fuer Deutschland became the third largest party.

The first coalition exploratory talks among the Union, the Greens and the Free Democratic Party (FDP) broke down in late November after FDP walked away from the negotiating table.

The coalition with the SPD, the so-called Grand Coalition as they are two largest parties in the Bundestag, remains the only feasible option for Merkel, who said a minority government would not be accepted.

It is expected that an agreement of the talks will be reached on Jan. 12, and then it will be submitted for each party to be approved.

A new government will not be born before the Easter even if talks go well.

Differences still exist between the two sides, especially between the SPD and the CSU. The SPD wants "a United States of Europe" as Schulz said, and the family reunion of refugees, while the CSU wants a limited European Union and opposes the family reunion. 

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