Angela Merkel, leader of Germany's conservative Christian Democratic Union party (CDU) sits in her limousine as she arrives for a party leaders meeting in Berlin October 10, 2005. (Reuters photo)

    BERLIN, Oct. 10 (Xinhuanet) -- German conservative leader Angela Merkel on Monday said that she plans to head the next German government in a grand coalition with incumbent Chancellor Gerhard Schroeder's Social Democratic Party (SPD) as a junior partner.

    "The Christian Democratic alliance (CDU/CSU) will occupy the chancellery," Merkel said the her first press conference as German Chancellor-designate, announcing her party had voted unanimously to open formal negotiations for a government with the SPD.

    She labelled the deal, reached after Schroeder agreed to step aside, "good and fair" and said the parties agreed that "there is no alternative to a reform course" for Germany.

    Merkel, to be the first woman chancellor in German history, made the announcement after meeting her top aides and holding another face-to-face meeting with SPD leadership.

    She said a grand coalition with Social Democrats would have towork on policies that help create new jobs in a "coalition of new possibilities. We want to do something for this country."

    "We have achieved something big, we have the basis for coalition talks," she said.

    Under the agreement, reached after Schroeder agreed to step down in recent talks between the two parties, the SPD and CDU/CSU will control eight ministries each.

    Almost all the major ministerial posts, the foreign, finance, labor, justice, health, transport, environment and foreign aid, will go to the SPD.

    The CDU/CSU will get the defense ministry, the interior and a new ministry for economics and high technology, according to the DPA.

    Wolfgang Schaeuble, former chairman of the CDU, will be interior minister while the CSU's chairman Edmund Stoiber will head the new ministry for economics and high technology.

    When asked about the direction of Germany's relations with the United States under her leadership, she said that transatlantic relations are an important issue and of interest forGermany. "That doesn't mean we have to agree on every issue, but there needs to be a good, trustful relationship."

    Formal negotiations to work out a government program are not expected to start until next week.

    However, under Germany's election law, the chancellor should beelected by the Bundestag or the low house of the parliament.

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    Therefore, an agreement between the SPD and CDU/CSU is "not a done deal" as several SPD members have vowed to vote against Merkelin the Bundestag.

    The outcome ended weeks-long political crisis resulted from the Sept. 18 elections, in which neither the SPD-Green coalition nor the CDU/ CSU-FDP alliance won a majority.

    The CDU/CSU seized 226 seats in the Bundestag, four more than that of the SPD.

    After attempts to join hands with smaller parties failed, the SPD and CDU/CSU have sought to forge a grand coalition government, which was once seen between 1966 and 1969.

    The two sides has edged closer on key issues such as the labormarket reform, social welfare system and public finances. Enditem.