German elections: president asks Merkel to break deadlock

Germany’s president has urged Angela Merkel and political leaders to get back to the negotiating table and compromise after talks to form a government collapsed, leaving Europe’s biggest economy in limbo.

While President Frank-Walter Steinmeier said he doesn’t favour snap elections, the clock is ticking. Germany has been in a holding pattern since September’s election, leading to speculation about whether it is time for Merkel to step down after 12 years.

The main sticking points involving migration and climate change, Sky News reports.  

Germany has several options. If there is no agreement, Merkel can form a minority government or the president could call a new election. Merkel said today that she will remain as acting chancellor and consult with Steinmeier on how best to move forward.

The collapse of talks is a blow to Germany, “throwing the leadership and direction of Europe’s largest economy into doubt,” the Wall Street Journal says.

The political uncertainty over Merkel’s failure to form a three-way coalition government initially triggered a fall in the euro last night and a drop in Germany’s Dax index early today.

But the euro fought back and the Dax 30 moved higher on the day as investors bought into the financial sector, the Financial Times reports.