Germany in Crisis as Chancellor Merkel Unable to Form New Government

merkel negotiations fail

Germany’s Chancellor Angela Merkel faced a hard weekend, which can be described as the night of the long knives, as she was desperately trying to revive the so called Jamaica coalition, which consists of four parties. After heavy talks and negotiations during the weekend, Angela Merkel’s efforts to form a new government failed, which means a new election is right around the corner.

After Sunday’s 12 hour long negotiations on forming Germany’s next government collapsed, Germany’s (which by the way is world’s fourth economy) Chancellor Merkel political future seems bleak and the news sent the euro sliding. The talks were abruptly halted on Sunday, after the Free Democratic Party said that their differences with their Green Party are insurmountable and too great to reach a consensus. The Free Democratic party literally walked out of the room and that marked the end of of the negotiations. The reason for the failed negotiations you asked? Well, the communist Greens are not happy with capping Germany’s intake of “refugees” to just 200,000 a year and with Berlin suspending family “reunifications” for war-refugees until March 2018:

“We will not accept that people who are already getting a lower status of protection by law are also excluded from family reunions. That is inhumane.”

There was no immediate comment from Angela Merkel and no further coalition negotiations were scheduled, as per Free Democratic Party boss Christian Lindner who was quoted as saying to reporters that:

“It’s better not to govern than to govern badly,”

Over the news that the negotiations had failed miserably, the Euro was down ~80 pips. The thing is, Germany is a very conservative country, politically speaking, as in they’re not accustomed to having multiple elections. Organizing a second election in early 2018 would most probably put the kibosh on Angela Merkel’s political career, thus sending a massive shock through Germany’s “swamp”.

While a second round of elections next year would make for the worst-case scenario, it’s very probable that Merkel will bite the bullet and will try to put together a new coalition, even if a new government under the current conditions would be fractious and weak.