Berlin - German Chancellor Angela Merkel and leading figures from her Christian Democrats (CDU), as well as the Bavaria-only Christian Social Union (CSU) and the Social Democrats (SPD) are set to meet Wednesday to prepare the ground for talks on forming a coalition government. Here is an overview of some key points of contention they face as they work out whether to formally begin coalition talks.

MIGRATION: There are significant differences between the parties with regard to refugee policy. The SPD wants to reintroduce the right of refugees with limited rights to remain to be joined in Germany by their families. The CDU/CSU say the right should remain suspended.The Union parties also want to introduce a compromise during the exploratory talks to limit the annual number of refugees to 200,000. The CSU has also called for cuts to benefits for asylum seekers. Both of these points are expected to meet with resistance from the SPD.

EUROPE: SPD leader Martin Schulz's goal of a "United States of Europe" has been rejected by the CSU. It will be interesting to see how Germany reacts to French President Emmanuel Macron's call for deeper integration in the eurozone and European Union. Both the SPD and the federal chancellery seem willing to react positively, given the centrifugal forces in the EU.

TAXES AND BUDGET: There is also plenty of scope for discord when it comes to money. The CSU wants a sharp increase in the defence budget, which the SPD opposes, calling instead for more money for education, families and infrastructure. The Union parties want to reduce taxes for citizens generally; the SPD for low and mid-level earners. The Union parties want to lower income tax by 15 billion euros (12.45 billion dollars) and abolish the so-called solidarity tax for everyone by 2020. The SPD wants to abolish the solidarity tax for those on lower and middle incomes. The SPD also wants an additional 2 billion euros of income tax relief for employees. The SPD would increase taxes on inheritance and the rich, and raise the top tax rate. ETC: Other areas where the parties favour differing approaches are immigration policy, health insurance and pensions.