Germany’s two main parties say there is a good chance of clinching a deal to form a grand coalition.Chancellor Gerhard Schroeder and his conservative opponent Angela Merkel have finished their third round of exploratory talks. The next meeting is slated for Thursday, and will attempt to resolve the dispute over who should lead the coalition. Schroeder has made comments that have been interpreted as a signal he will step down. However the SPD’s official position remains that he should continue as chancellor. The Christian Democrats have again reiterated that no formal talks are possible until he makes way for Merkel. “I see positive signs as far as finding common political ground is concerned and that gives me hope that we will be able to start substantive negotiations,” Merkel said. The CDU’s position has been strengthened by the Dresden by-election on October 2, in which it gained extra seats. But the SPD says the margin still falls short of a clear mandate for a Merkel-led government. If there is no deal parliament must meet by October 18 to hold its first vote on choosing a new chancellor.