(L-R) State Premier for Bavaria, Horst Seehofer; German Chancellor Angela Merkel and leader of the Social Democratic Party Martin Schulz arrive at a press conference after talks to form a new government, at the SPD headquarters in Berlin. Pic/AFP

German Chancellor Angela Merkel pledged on Friday that the new government she is seeking to form would work toward a "fresh start" for Europe, after reporting a breakthrough in marathon coalition talks.