Germany in Political Turmoil as Coalition Talks Fail

Chancellor Angela Merkel was left scrambling to drag Germany out of crisis Monday after high-stakes talks to form a new government collapsed, potentially forcing Europe’s top economy into snap elections.

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, AFP reported.

With no other viable coalition in sight, Germany may be forced to hold new elections that risk being as inconclusive as September’s polls.

Merkel, whose liberal refugee policy has proved deeply divisive, had been forced to seek an alliance with an unlikely group of parties after the ballot left her without a majority.

But following 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 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 share “a common vision on modernizing” 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.

News magazine Der Spiegel called the breakdown in negotiations a “catastrophe” for Merkel and said Germany, long seen as an island of stability, was having its “Brexit moment, its Trump moment”.

French President Emmanuel Macron, who has sought Merkel’s backing for an ambitious EU reform plan, expressed concern about Germany’s political deadlock, saying “it is not in our interest that the situation becomes tense”.

The Dutch foreign minister said “It’s bad news for Europe that the government in Germany will take a little longer,” Reuters reported.

“Germany is a very influential country within the EU so if they don’t have a government and therefore don’t have a mandate it’ll be very hard for them to take positions,” Halbe Zijlstra said on arrival for talks with EU peers in Brussels.

European shares rose on Monday as confidence over global economic activity helped investors brush off worries over the collapse of government talks in Germany.

Germany’s DAX benchmark rose 0.2% to above 13,000 points after reversing earlier losses that sent the index down as much as 0.5%. The broader pan-European STOXX 600 index added 0.3%.

  Populist Agitation

The acrimonious negotiations stumbled on a series of issues including immigration.

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

The Greens angrily deplored the collapse of talks, saying they had believed a deal could be done despite the differences and accusing the FDP of negotiating in bad faith.

Lindner, who had taken a harder line on refugees as the talks progressed, “opted for his kind of populist agitation instead of political responsibility” Greens Europe MP Reinhard Buetikofer tweeted.

  Chancellor in Danger

Merkel could now try to convince the Social Democratic Party (SPD), which has been the junior coalition partner in her government since 2013, to return to the fold.

But after suffering a humiliating loss at the polls, the party’s top brass has repeatedly said the SPD’s place was now in the opposition.

Merkel, who has been in power for 12 years, could also lead a minority government although she had signaled that she was not in favor of such instability.

Germany could therefore be forced to hold new elections, which would have to be called by President Frank-Walter Steinmeier.

But that is not without peril for Merkel, who would face questions from within her party on whether she is still the best candidate to carry its banner into a new campaign.

Top-selling Bild daily said a failure to forge a tie-up —a so-called “Jamaica coalition” because the parties’ colors match those of the Jamaican flag— put “her chancellorship in danger”.

A poll by Welt online also found that 61.4% of people surveyed said a collapse of talks would mean an end to Merkel as chancellor. Only 31.5% thought otherwise.

As talks dragged on without a breakthrough, Steinmeier had on Sunday issued a warning to parties not to recklessly force new elections.

“All sides are aware of their responsibilities. And this responsibility means not returning their mandate to voters,” he told Welt am Sonntag.

Merkel was to meet with Steinmeier later Monday to discuss the crisis but planned talks with Dutch Prime Minister Mark Rutte were hastily cancelled.