German Chancellor Angela Merkel has said she is ready to make “painful concessions” to help her conservative bloc and the Social Democrats (SPD) reach a deal on forming a coalition government some four months after inconclusive elections that left Europe’s biggest economic power in political uncertainty.

Axar.az reports citing Press TV.

“Each of us will have to make painful compromises and I am ready for that,” Merkel said Tuesday as she sought to reach a deal with the SPD by the end of the day.

Merkel, who failed to form a coalition with two lesser-known parties in November, is well aware of the consequences of a no-deal situation as her aspirations for completing the fourth term in office would be hugely undermined by a minority government.

The SPD, which scored poor results in the general elections like Merkel’s CDU/CSU alliance, initially rejected a new partnership with Merkel. It is now trying to extract concessions from the German leader as many in the ranks of the party are principally opposed to maintaining the so-called grand coalition that has ruled Germany since 2013.

Merkel said prolonged talks on coalition had clearly affected markets and investors, adding that there was a need for a swift agreement.

“When we see the movements on the stock markets over the last hours, we live in turbulent times and what is expected of us as popular parties ... is that we form a government for the good of the people, one that brings stability,” the German chancellor stated.

Talks were prolonged to Monday and Tuesday after the conservatives and the SPD failed to meet an initial target of Sunday. Sources said there was no chance for the two sides to extend the talks beyond Tuesday.