Germany headed for fresh polls as alliance talks collapse

Chancellor Angela Merkel was left battling for political survival today after talks to form a new government collapsed - plunging Germany into a crisis where experts see fresh elections as the most likely outcome.

Chancellor Angela Merkel

Europe's biggest economy now faces weeks, if not months of paralysis with a lame-duck government that is unlikely to take bold policy action. And with no other viable coalition in sight, Germany may be forced to hold new elections that risk being as inconclusive as September's polls.

The only way a majority could be theoretically achieved would be by a coalition of Merkel's Christian Democrats (CDU), its Bavarian sister party the Christian Social Union (CSU) and the Social Democrats (SPD).

However, after a poor election showing in September, the SPD committed to an opposition role and has not changed its position.

The party's deputy leader Ralf Stegner made it clear on Sunday night: "The situation for the SPD will not change as a result of the collapse of the coalition talks."

Fellow deputy leader Thorsten Schäfer-Gumbel added that the SPD was "not the spare wheel on Angela Merkel's careening car."

Merkel had been forced to seek an alliance with an unlikely group of parties after September's elections left her without a majority.

But after 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 the ecologist Greens.

''It is better not to govern than to govern badly,'' he said, adding that the parties did not have ''a common vision on modernising'' Germany.

Voicing regret for the FDP's decision, Merkel vowed to steer Germany through the crisis. ''As Chancellor... I will do everything to ensure that this country comes out well through this difficult time,'' she said.

The Greens' leaders also deplored the collapse of talks, saying they had believed a deal could be done despite the differences.

The negotiations, which turned increasingly acrimonious, had stumbled on a series of issues including immigration policy.

Merkel's liberal refugee policy that let in more than a million asylum seekers since 2015 had also pushed some voters to the far-right AfD, which in September elections campaigned on an Islamophobic and anti-immigration platform.

The parties also differed on environmental issues, with the ecologists wanting to phase out dirty coal and combustion-engine cars, while the conservatives and FDP emphasise the need to protect industry and jobs.

Party chiefs had initially set 6:00 pm (1700 GMT) Sunday, but the deadline went by without a breakthrough - the second overtime after already missing a previous target on Thursday.

Signs that talks were going badly began emerging late on Sunday and Bild daily said on its website that ''failure is in the air'' as parties dug in their heels on key sticking points.

Merkel on shaky ground
Merkel, who has been in power for 12 years, could potentially lead a minority government although she had signalled that she was not in favour of such instability. In any case, this model, which is quite common in other countries, has not yet been tested at a federal level in Germany, as local media have pointed out.

Germany could likely therefore be forced to hold new elections. And Merkel would face questions from within her party on whether she is still the best candidate to lead them into a new electoral campaign.

Top-selling Bild daily said on Sunday that a failure to forge a tie-up - dubbed a ''Jamaica coalition'' because the parties' colours match those of the Jamaican flag - puts ''her chancellorship in danger''.

A poll by Welt online also found that 61.4 per cent of people surveyed said a collapse of talks would mean an end to Merkel as chancellor. Only 31.5 per cent thought she could still hang on.

As coalition talks dragged out without a breakthrough, Germany's President Frank-Walter Steinmeier issued a warning to parties in the talks.

''All sides are aware of their responsibilities. And this responsibility means not returning their mandate to voters,'' he said in an interview with Welt am Sonntag.

Sueddeutsche daily noted that . Steinmeier's warning came because he sees in new elections ''the risk that even a bigger coalition or a Jamaica coalition would no longer have a majority''.

''Then the loss would have been greater than the failure of forging a government,'' it said.