Kiel, Germany, April 4, SPA -- Social Democrats loyal to German Chancellor Gerhard Schroeder and their Christian Democrat archrivals opened talks Monday on forming a coalition government in Schleswig-Holstein, the northernmost of Germany's 16 states. Peter Harry Carstensen, a Christian Democrat (CDU) farmer expected to become state premier, and the new state Social Democrat (SPD) leader, Claus Moeller, met to survey the state's meagre revenues. Each man was attended by two aides. The state's dire finances will limit any plans for policy initiatives in the five-year period until the next state election. Full-scale negotiations on a political programme for a grand coalition were to begin Wednesday. While such a coalition was likely to ensure stability in the rural coastal state, it would dismay Schroeder because it will increase the opposition's grip on Germany's federal upper house, or Bundesrat, which represents the 16 state governments. The two sides have jockeyed for position since a hung election February 20 and the dramatic failure of SPD state premier Heide Simonis to win a confidence vote March 17, but they were cordial Monday. Simonis made her farewell from politics earlier in the day. --SPA 2320 Local Time 2020 GMT www.spa.gov.sa/252140