BERLIN (Reuters) - German Foreign Minister Sigmar Gabriel on Saturday denied a report that said the Social Democrat, whose party has agreed to enter talks with Chancellor Angela Merkel's conservatives on forming a coalition, was eyeing the post of finance minister.


News magazine Der Spiegel reported that Gabriel had recently told senior members of his SPD party that he was interested in becoming German finance minister if the SPD agreed to a re-run of the current 'grand coalition' with Merkel's conservatives.


"What Spiegel is writing is sheer nonsense," Gabriel told Deutschlandfunk radio. "I'm in a caretaker government and no one knows what the next government will look like."


More than two months after a national election, Germany has not managed to form a new government, so the conservative coalition from the last legislative period is still in power.


Merkel, who lost many supporters to the far-right in September's election, is banking on the SPD to extend her 12-year tenure after attempts to cobble together an awkward three-way alliance with the liberal Free Democrats and environmentalist Greens crumbled.

If the SPD were to agree to another 'grand coalition' - an option that the SPD says is by no means a foregone conclusion - and demand the finance ministry, it would likely result in changes to Germany's European policy such as more focus on spending and investment rather than austerity.

Wolfgang Schaeuble, who was Germany's conservative finance minister until he took on the role of president in October, became unpopular among struggling euro zone states during his eight years in office due to his focus on austerity.

SPD leader Martin Schulz said on Thursday that Europe could not afford to undergo another four years of the kind of European policy that Schaeuble had practiced.

(Reporting by Michelle Martin; Editing by Elaine Hardcastle)