Merkel to brief German president on coalition talks' failure

Merkel to brief German president on coalition talks' failure

German Chancellor Angela Merkel's efforts to form a three-way coalition government that would secure her a fourth term hit a major setback on Sunday after a would-be coalition partner pulled out of exploratory talks, citing irreconcilable differences. But following more than a month of gruelling negotiations, the leader of the pro-business FDP, Christian Lindner, walked out of talks, saying there was no "basis of trust" to forge a government with Merkel's conservative alliance CDU-CSU and ecologist Greens.

Party chiefs had initially set a deadline of 1700 GMT on Sunday, but that passed without a breakthrough - after already missing a previous target on Thursday.

Yet, the element of political risk in Euro exchange rates could grow further over coming days and weeks should the issue of German leadership deteriorate.

Merkel said that "we thought we were on a path where we could have reached agreement", when that the Free Democrats chose to pull out.

The decision to meet President Frank-Walter Steinmeier, who has the power to call a new election, signaled that Merkel would not seek a minority government with the Greens after the FDP unexpectedly pulled out of the coalition talks.

Former coalition partners the Social Democrat party have of course previously ruled out forming a grand coalition with Merkel's ruling CDU/CSU, suggesting there are few options left for Merkel.

"It is better not to govern, than to govern falsely", he said.

Germany faces uncertain political future as gov't talks fail
Merkel 'prefers new vote' after talks fail

The center-left Social Democrats, Merkel's partners in the outgoing government, have been adamant about going into opposition after a disastrous result in the September 24 election. "Then the loss would have been greater than the failure of forging a government", it said. "However, the only possible democratic constellation was unfortunately shot down by the FDP", he said.

Failure to reach a deal could lead to a new election, something all the parties are anxious to avoid as they fear this could lead to the far-right Alternative for Germany (AfD) making further gains after surging into parliament in September. "And this responsibility means not returning their mandate to voters", he said in an interview with Welt am Sonntag.

A "Jamaica coalition" - so named for the party colors of the three blocs - has worked at the state level, but had never been attempted at the federal level. But they struggled to find consensus on the hot button issue of immigration after more than 1 million people seeking refuge entered the country since 2015.

During four weeks of hard exploratory coalition talks, the parties were able to agree in principle on a number of issues, from digitalization to agriculture.

There is little appetite for a second vote, especially as the main parties fear that the populist AfD would win more than the nearly 13 percent of votes it secured in September.

"And it is also a risky game of poker for Germany", Janes added.

The FDP and CDU/CSU were against hastily shutting down coal-fired power plants over concerns about job growth and the economy.

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