Germany’s Chancellor Gerhard Schroeder prepares for a second round of talks later today which could put an end to the country’s political limbo.According to a leading German newspaper, Schroeder’s Social Democrats are backing down over the insistance that he should remain as chancellor. Speaking in Strasbourg at a function on the future of the EU, Schroeder implied a power sharing deal was near. He said that the people had voted for the renewal of their country without sacrificing social cohesion and that this reqired a government making that a priority. He went on to say that such a government will emerge in the form of a grand coalition. Angela Merkel and her conservative Christian Democratic Union are insisting that before they enter into any coalition, Merkel, as leader of the party with a bigger share of the votes, should be made chancellor. But although she reiterated her claim to the top job, it has been suggested that the SPD climbdown is dependent upon Merkel’s party choosing another candidate to lead them. As neither party has a majority after last week’s election, some form of compromise needs to be found before Germany has a new government.