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It has been 12 weeks since Chancellor Angela Merkel won a national election that offered her a fourth term as head of the German government. Unfortunately, her Christian Democratic Union (CDU) was unable to form a ruling coalition after weeks of talks with two other small parties. It now appears that the CDU’s former governing partner, the Social Democratic Party (SPD), has reversed course and is prepared to discuss a coalition with the CDU. This is a hopeful development for Germany, Europe and the world. We need a functioning government in Berlin.

The CDU’s victory in the September ballot was no surprise. The evisceration of the SDP, which had been Germany’s second-largest party and a historical alternative to the CDU, was a shock. When the dust had cleared, it retained its position as the top opposition party but the SPD had lost 40 seats in its worst-ever election performance. Convinced that partnership in a “grand coalition” with the CDU had alienated the party base and cost it credibility among independent voters, party leader Martin Schulz vowed to stay out of any future coalition government, reasoning that opposition would allow the party to forge a coherent identity and position it to better contest the next national ballot.

The SPD’s refusal to join a government forced Merkel to explore a coalition with three parties: the CDU, the Greens and the pro-business Free Democratic Party. Those talks broke down last month over differences on immigration and energy policy. That prompted the SPD to reverse course and agree to talks with the CDU over the terms of a coalition. The U-turn reflected sentiment among SDP members — one poll showed 68 percent favored a new grand coalition — as well as divisions among the leadership and pressure from German President Frank-Walter Steinmeier, a former SPD foreign minister, to consider a coalition. Talks will begin this week to explore guiding principles and forms of cooperation, but a final vote on cooperation will be made by the party’s membership, which will hold a congress Jan. 14.

Cooperation does not necessarily mean a formal coalition. Other options include a “cooperative coalition,” or “KoKo,” in which the SPD would get a few ministerial portfolios and would ensure cooperation only on basic issues, such as the budget or policy toward Europe. This would allow the parties to compete on other concerns. A second option is a CDU minority government that the SPD would support on critical issues. This is a flexible formula that would force Merkel to find a majority on each particular vote. Both proposals would provide some stability while at the same time minimizing SPD responsibility for unpopular decisions. Both appeal to the left wing of the party and its youth wing, which are suspicious of Merkel and the CDU. The chancellor and her party prefer the grand coalition for the stability, consistency and predictability it would create, as well as sharing blame for any unpopular decisions.

SPD reservations notwithstanding, a grand coalition is most likely, which would continue an alliance that has ruled Germany since 2013, and for eight of the last 12 years. But Schulz, who has been forced to backpedal, insists that the new coalition cannot be “business as usual.” The SPD wants more investment in education and health care, more protections for workers on temporary contracts, tax relief for families, more affordable homes and reform of the EU.

Merkel has welcomed the SPD reversal. Noting the many challenges that Germany faces and the need for a stable government to address them, she explained after the SPD decision that “Europe is unthinkable without a strong Germany and strong cooperation between Germany and France, and that’s why we have a huge responsibility to form a stable government.” She is correct. A stable and consistent government in Berlin provides much needed ballast in European conversations as well as in global councils. Germany’s role has assumed still greater importance given new thinking in Washington. The U.S. administration of President Donald Trump is increasingly skeptical of institutions of international order and governance and Europe has stepped up to provide support for them. That assignment has become more difficult as Europe grapples with its own internal problems, such as Brexit, immigration flows and a resurgence of populism throughout the union.

It is also clear, however, that Berlin must change some of its policies. Both the SPD and the CDU suffered big losses in September’s vote and they must do more to respond to the concerns of voters. Balancing domestic anxieties with larger regional and global interests can be difficult, and Merkel, a conservative by policy and disposition, is inclined to stick to existing positions. But she, if anyone, should be able to find a formula for success. The world is rooting for her.

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