This article examines the formation of the Grand Coalition in the context of the German party system and draws upon a synthetic analytical framework derived from formal coalition theory. It argues that both the SPD and CDU/CSU would have anticipated that the Grand Coalition would have generated relatively high levels of inter-party conflict as well as significant electoral costs. The article demonstrates that the CDU/CSU's motives for entering a Grand Coalition were quite evident but those of the SPD were more questionable. The SPD's course of action is only explained by a number of specific policy objectives, a desire to minimise co-ordination costs, and through the concept of pure time preference, in which SPD elites demonstrated a preference for an established coalition model over new and untested coalition options. The article concludes that, whilst it is not possible to demonstrate that the Grand Coalition increased the rate of party system fragmentation, it failed to stabilise the declining vote share for the two Volksparteien.