Berlin, Feb 7 (IANS): Talks between Germany's ruling Christian Democratic Union (CDU) and the centre-left Social Democratic Party (SPD) on forming a new government are yet to yield an agreement after a session that lasted all night and into Wednesday.

The negotiations have already exceeded the deadline set by Chancellor Angela Merkel's CDU and its Bavarian sister party, the Christian Social Union (CSU), and the SPD to reach a consensus on a grand coalition, reports Efe news.

According to information leaked from the CDU headquarters, efforts to reach an agreement have stalled since Tuesday, over four months after the elections were held.

The parties, which were able to agree on several issues such as housing, rent and business digitalisation, have stumbled over healthcare, the labour market and foreign policy.

On Tuesday, Merkel warned both sides needed to make "painful compromises", adding that she was ready to do so if they would benefit the country.

The SPD leader, Martin Schulz, faces a struggle to convince the more militant factions within his party, including its youth wing known as "Jusos", to enter into a coalition with the centre-right ruling party.

Schulz hopes to convince the SPD's more sceptical members, who have the final say on whether to proceed with the coalition with the centre-right, by securing concessions on healthcare and employment.