Chancellor Angela Merkel's prospects for a fourth term in office are in danger after she was unable to forge a coalition government Photo: AFP
Germany's president on Monday urged political parties to find compromises and avoid snap elections, hours after the collapse of high-stakes coalition talks plunged the EU's top economy into crisis.
President Frank-Walter Steinmeier, who holds the power to call a new vote, made it clear that this was not his favored option, as he told mainstream parties to rethink their positions and return to the negotiating table.
Chancellor Angela Merkel, whose fourth term in office is now in danger, was forced into seeking a coalition with an unlikely group of parties after inconclusive elections in September left her without a clear majority.
But after more than a month of grueling negotiations, the leader of the pro-business FDP, Christian Lindner, walked out of talks overnight, saying there was no "basis of trust" to forge a government with Merkel's conservative CDU-CSU alliance and the left-leaning Greens.
Voicing regret at the FDP's decision, Merkel vowed to steer Germany through the crisis, saying she would "do everything to ensure that this country emerges well from this difficult time."
But the reality is that Germany now faces weeks, if not months, of paralysis with a lame-duck government that is unlikely to take bold policy action at home or on the European stage.
French President Emmanuel Macron, who has sought Merkel's backing for an ambitious EU reform plan, expressed concern about Germany's political deadlock, adding that he hoped Berlin would remain a "stable and strong" partner to allow the two partners to "move forward together," his office said.
The euro and Germany's blue-chip DAX stock market index fell slightly on the news of the stalemate, but later clawed back early losses.
- 'Populist agitation' -
The acrimonious negotiations stumbled on a series of issues, in particular immigration.
Merkel has let in more than one million asylum seekers since 2015, sparking a backlash that allowed the far-right AfD party to win its first seats in parliament.
The AfD's parliamentary co-leader Alexander Gauland welcomed the collapse of the talks, saying that Merkel had "failed" and that his party "looks forward to potential new elections" in which it hopes to make further gains.
The negotiating parties also differed on environmental issues, with the Greens wanting to phase out coal-fired power plants and combustion-engine cars, while the conservatives and FDP emphasized the need to protect industry and jobs.
Quitting the lengthy talks around midnight, Lindner declared that "it is better not to govern than to govern badly".
Breakdown of the German Bundestag, or parliament Photo: AFP
After suffering a humiliating loss at the ballot box, the Social Democratic Party’s (SPD) leaders have repeatedly said that they will not renew an alliance with Merkel and that the party's place is now in the opposition.
Merkel, who has been in power for 12 years, could also lead a minority government, though she had signaled that she is not in favor of such instability.
Voters in central Berlin expressed shock about the sudden injection of high drama into the often-staid world of German politics.
Sarah Untheim, 23, said she feared the "very chaotic" outcome could help the AfD mobilize more supporters.
But law student Alexander Streb, 20, said he believed the upheaval did not spell "the end of the Merkel era".
"She stands for stability, that's also why young people like her," he told AFP.