Elements of a 28-page policy paper backed Friday by Merkel and Social Democratic Party (SPD) leader Martin Schulz as the basis for recommended formal coalition talks have quickly drawn criticism.
Although the coalition agreement has yet to be formally announced, preliminary reports suggest that negotiators have struck a deal on the outlines of a program, concluding a process which began after last September's inconclusive general election. It must now be voted on by the SPD party conference later this month, where there is likely to be resistance from members who believe a coalition would further damage their electoral appeal. "I think we produced excellent results".
"We want to strengthen the European Union financially, so that it can better fulfill its tasks: which is why we will take this into account during the preparation of our financial framework for the upcoming years", the 28-page document, which the two parties agreed upon, said.
The common European foreign and security policy must be strengthened in the sense of a peace power Europe, says the document, calling for strengthened cooperation in security and defense policy (PESCO) and bringing it to life.
The chancellor is under pressure to succeed after her attempt to patch together a coalition with the Green party and the pro-market Free Democrats failed in November.
The conservatives also performed poorly in the election, and the three coalition parties' support dropped by a total of almost 14 percentage points. "Together we are determined to use Germany's strength, both economically and politically, to make Europe a great project again".
But both parties bled support in the September 24 election, which saw the far-right Alternative for Germany (AfD) enter the Bundestag lower house of parliament for the first time. And there will be a limit of 1,000 per month on the number of close relatives allowed to join migrants in Germany who are granted a status short of full asylum.
The SPD party base had to be mobilized, Bülow said, to "stop this grand coalition from within Social Democrats".
The parties pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax.
But party leaders were in a buoyant mood on Friday morning.
Although Merkel's Christian Democrats differ with many of French President Emmanuel Macron's proposals for sweeping reforms of the European Union, Merkel expressed hope they would hammer out compromises to address major challenges facing the bloc.
"We have, in what feels like a long time since the election, seen that the world will not wait for us", Merkel said.
The European Commission President said in Bulgaria: "In terms of the substance I'm very happy with what the CDU/CSU and the SPD have agreed". He also supports the creation of a finance minister and stand-alone parliament for the eurozone - ideas that are viewed with scepticism in Germany and did not appear in the coalition document.