German Coalition Talks Pressure Euro, Global Stock Markets

German Coalition Talks Pressure Euro, Global Stock Markets

German Coalition Talks Pressure Euro, Global Stock Markets

German Chancellor Angela Merkel has said she would prefer new elections to leading a minority government, after a breakdown in coalition talks plunged the country into political crisis. But a fresh vote looked increasingly likely, a prospect met with glee by the German far-right and by waves of apprehension across Europe, where German stability has always been taken for granted.

There had been hopes for a "Jamaica coalition" - so called due to the parties' colors mirroring that of the Jamaican flag - that combined Merkel's CDU and its Bavarian sister party, the Christian Social Union (CSU), both black, the pro-business FDP, who are yellow, and Germany's Greens party.

Asked about the possibility of another "grand coalition" with the Social Democrats, Merkel said she would wait to see the party's response after their talks with President Frank-Walter Steinmeier on Wednesday.

"It is better not to govern than to govern badly", said Lindner, adding that "we can not and will not answer for the spirit of the exploratory papers".

Merkel said she was skeptical about the viability of a minority administration.

Several hours ahead of Merkel's comments, President Steinmeier appeared to rule out snap elections for now, instead emphasizing the obligation each party had to the voters.

Merkel told German broadcaster ZDF she was ready to serve four more years as chancellor, and felt it was important to send a signal of stability for the country and Europe and the world.

"We now stand before a situation that has never occurred in the history of the Federal Republic of Germany, going back 70 years", Steinmeier said.

There is little appetite for a new election.

The talks have also missed deadlines as it has in the past in many occasions.

Another 32 per cent believe the FDP are responsible for the failure, which came just days after Christian Lindner, the party's leader, dropped out of talks after parties failed to agree on key issues including immigration and Europe.

The main parties fear another election so soon would let the far-right, anti-immigrant Alternative for Germany (AfD) party add to the 13 percent of votes it secured in September, when it entered parliament for the first time.

"In view of the results of the September 24 election, we are not available for a grand coalition", said SPD chairman and defeated chancellor candidate Martin Schulz in Berlin on Tuesday. "The only possible democratic constellation was unfortunately shot down by the FDP", he said.

Earlier, Merkel got the strong backing of her CDU leadership.

Unless the center-left SPD has a change of heart or Merkel can engineer a revival of the collapsed talks, she faces two unappetizing options - trying to form a minority government or accepting the country will have to vote again. Germany's political impasse could also complicate and potentially delay the Brexit negotiations - Britain has just over a year to strike a divorce deal with the European Union ahead of an exit planned for March 29, 2019.

"It is a day of deep reflection on how to go forward in Germany", Ms Merkel told reporters.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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