Germany plunged into political crisis after talks to form government break down

German chancellor Angela Merkel leaves the presidential residence in Berlin on November 20, 2017. She met with the German president there after coalition talks failed overnight. Odd Andersen / AFP

Germany was plunged into a full-blown political crisis on Monday after talks to form a new government broke down, casting doubt on chancellor Angela Merkel's political future and leaving Europe rudderless.

Negotiators from the small pro-business Free Democratic Party (FDP) walked out of the talks shortly before midnight on Sunday, declaring that after four weeks of meetings, there wasn't enough mutual trust or common ground between the parties present to work together.

Mrs Merkel's conservative Christian Democratic Union (CDU) party had been forced to seek an awkward and unprecedented national coalition with the FDP and the environmentalist Greens because it was the chancellor's only option to secure a fourth term following legislative elections on September 24 in which she suffered a steep drop in support. Voters punished Mrs Merkel for an open-border policy that allowed more than a million refugees fleeing Syria and other parts of the Middle East and Africa to enter Germany.

Before the election, the chancellor had for four years shared power with Germany's centre-left Social Democratic Party (SPD). But it has refused to join her government again and reiterated that position on Monday despite mounting pressure for it to reconsider.

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That leaves the embattled chancellor with only two options, neither of them palatable: a minority government, never attempted before in a nation accustomed to stable governments for decades. Or a new election that could produce the same deadlock and might strengthen support for aggressively far-right nationalists who emerged as the third-biggest force in parliament in the September vote, causing international concern and alarming Muslim and Jewish leaders.

In an interview with ARD public television's Brennpunkt programme on Monday, Mrs Merkel indicated her preference for fresh elections.

"I don't have a minority government in my plans," she said, according to Associated Press. "I don't want to say never today, but I am very sceptical and I think that new elections would then be the better way."

Earlier in the day, Mrs Merkel, who has been chancellor for 12 years, looked exhausted as she faced the cameras following the failure of talks.

“This is a day of deep reflection on how things will go on in Germany but I want to tell you that I as chancellor, as caretaker chancellor, will do everything to lead this country well through these difficult weeks,” she said.

It could be more than weeks. Germany now potentially faces political paralysis for months, which in turn will throw the European Union into limbo just as it seeks to reform itself in the wake of Brexit and tries to put up a common front in the face of China’s growing power and geopolitical uncertainty fanned by US president Donald Trump's unpredictable and often controversial approach to foreign policy.

Under the German constitution, it is now up to the federal president, Frank-Walter Steinmeier, to decide how to proceed. After meeting Mrs Merkel on Monday, he appealed to all parties to make a fresh attempt to form a government, and said he would speak to all party leaders — apart from the nationalists — in the coming days.

“We face a situation that is unprecedented in the history of the German federal republic, which is almost 70 years,” he said.

“This is the moment when everyone should stop and rethink their positions. All parties elected to the parliament are obliged to serve the common good, they serve our country. I expect them all to show readiness to negotiate to make the formation of a government in the foreseeable future possible.

“Those who seek political responsibility in elections must not shirk it if they hold it in their hands. Inside and outside our country and especially in our European neighbourhood, there would be deep incomprehension and concern if the political forces in Europe’s biggest and economically strongest country didn’t live up to their responsibility.”

For the time being, the SPD’s ministers from the old government remain in office, including foreign minister Sigmar Gabriel whose criticism last week of Saudi Arabia’s role in the Middle East has triggered a diplomatic spat with the kingdom.

“This will be a difficult period in which the most important and strongest nation in Europe now has no political stability,” said Hesse state governor Volker Bouffier, a senior member of Mrs Merkel’s CDU party.

Outside of Germany, other European politicians voiced their concerns.

Dutch foreign minister Halbe Zijlstra said the collapse of coalition talks was “bad news for Europe”, while a French government official said: “For Germany and for Europe, we want our main partner to be stable and strong, to move forward together.”

French president Emmanuel Macron needs German support for his proposed EU reforms, including deeper fiscal integration with a eurozone budget and a finance minister.

Business leaders also expressed their alarm, saying Germany urgently needed a strong government to tackle chronic under-investment in digital infrastructure, roads and railways.

Hans Peter Wollseifer, the head of the German Skilled Crafts Sector Association, said the failure of the talks was “poison for the economy”.

“The parties have done Germany a disservice,” he said. “An opportunity has been missed to drive forward Germany’s modernisation with a new, fresh government constellation.”

A new election in Germany would not be possible until spring next year. And a minority government, in which Mrs Merkel would form a coalition with the FDP or with the Greens and rely on winning opposition support for specific policies, would be too unstable to last a full four-year term, commentators have said.

Mrs Merkel looked more isolated than ever before on Monday as critics said she had failed to show the necessary leadership and vision to unite the parties, a common accusation levelled at the ever-cautious Protestant pastor’s daughter.

But crucially, Mrs Merkel's own party is sticking by her and there is no obvious successor waiting in the wings to plunge the knife in. Senior CDU members rallied to her side on Monday, declaring that she was not to blame for the collapse of talks.

“The support for Angela Merkel was so unanimous and clear that I don’t expect that anyone else here will become the candidate,” said Elmar Brok, a member of the European Parliament for the CDU.

The conservatives’ anger was instead directed at the FDP, whose leader, Christian Lindner, declared after fruitless attempts to agree on issues such as migration, environmental policy and tax policy: “It’s better not to govern than govern wrongly.”

Prominent political analyst Gero Neugebauer of Berlin’s Free University said Mrs Merkel should not be written off just yet.

“There’s no alternative to Ms Merkel in the conservatives at present," he said. "It’s become a lot more difficult for her. But there are politicians who get strong when they’ve got their backs to the wall.”