boring conclusion: the CSu/Seehofer blinked and as predicted they came up with an unworkable "compromise" that will do exactly nothing to deal with the official reason for this rucus and worse everyone knows that its unworkable and will do nothing - with the very limited exception that it includes some items that the SPD has ruled out in the past and will now either have to accept (which would be insane, but with the current SPD leadership you never know which opportunity to hurt themselves they embrace) or rule out again in which case Seehofer can throw another tantrum.
I strongly believe all the actors want an AfD/Linke coalition government or something like that- atleast they are actively working to strengthen the out of power parties...
Nah, I think almost everyone actually does have some valid reasons from their point of view.
If you take the CSU, they got a horrible result at the federal election, but that didn't happen because of what they were saying, but what they were doing. More than once Seehofer acted all tough and then backed down again. He went out of his way before the election to get something done, only do back down even more spectacularly, falling right in line with the CDU, suggesting that everything was just fine. That's what the voters punished, not the stances taken, else the AfD wouldn't have fared that well. What happened is that people simply didn't trust someone who was all talk but wouldn't walk the walk. Why should someone who is unhappy with the refugee situation vote for someone who has proven to back down every time the going got tough, when he can vote for a party that hasn't backed down?
Now the election in Bavaria is coming up, and the CSU - and especially Seehofer - try to get something done before the election, to prove that they can actually keep their word and do things. Judging from their position heading into the election, they desperately need some results. Current polls would put them in a position where they would need to form a coalition with the SPD, Greens or AfD, none of whcih can be to their liking. Merkel isn't really inclined to follow that approach, because it doesn't fit to her politics, but more importantly because she doesn't want to lose power, and she knows that the SPD can't really accept these ideas.
Almost everyone is in a bad spot. The CDU is not looking good under this current debate and really can't afford to let this government fall apart. The CSU needs some successes heading into the state election, or they will lose drastically. The SPD can't really carry forward ideas they rejected just a short time ago, but can't really let the government collapse either, because a new election isn't going to help them one bit. The small parties don't have all that much to worry about when it comes to their own position, but they don't benefit all that much either. Not only is the AfD generally the main benefitiary in polls, but each of the other three parties also has little to gain by the weakness of the main parties. With the CDU as weak as it is, the FDP has no chance to get into government without a more left-wing party being part of it. That kind of situation wouldn't be benefitting it. Greens and Left meanwhile don't gain anything either, because the weakness of the SPD prevents any sort of left-wing coalition.
If recent polls are any indication, the "grand-coalition" is dangerously close to not having enough seats for a majority if a election would come up. It would basically be done to 2/3 (unrealistic) options. The one that didn't end up happening after the last election, CDU-Greens-FDP, a leftish approach that the CDU-CSU would never go with in CDU-SPD-Greens, or CDU-SPD-FDP, which seems like a tough sell as well.