German coalition talks to extend into next week amid global turmoil

Negotiations between the conservative CDU/CSU bloc - made up of Friedrich Merz's Christian Democrats (CDU) and the Bavaria-only Christian Social Union (CSU) - and the centre-left Social Democratic Party (SPD) have been ongoing for weeks since February's parliamentary election.

Merz, the presumptive next chancellor, has said he'd like to have a goverment formed by Easter.

The wait for the new administration to form has been criticized by business leaders, with US President Donald Trump's unprecedented tariff announcement this week adding extra pressure for a government to take shape.

Germany's export-based economy is set to be hit hard by the 20% duties on goods from the European Union, and the country's leading stock market index was down again early on Friday after dropping 3% on Thursday.

But ahead of another round of negotiations in Berlin on Friday, senior CDU representative Thorsten Frei said "there is still a considerable way to go."

"I therefore expect that we will be going into next week," he added.

The two sides have made progress and are "moving towards each other," Frei said. "Now, it's about getting the stumbling blocks out of the way."

Financial issues are believed to be the main remaining point of contention, with the CDU/CSU bloc seeking budgetary cuts while the SPD seeks to protect welfare spending.

Alexander Dobrindt from the CSU said the talks are "slowly turning into a final curve."

After the parties achieved some breakthroughs on Thursday, Dobrindt said he expected "that big progress will be made today and on the weekend."