Exploratory talks to form Germany’s next coalition government collapsed shortly before midnight on Sunday when the pro-business Free Democratic Party (FDP) walked out of marathon negotiations.
“The four discussion partners have no common vision for modernisation of the country or common basis of trust,” the FDP leader, Christian Lindner, announced after the four parties involved missed several self-prescribed deadlines to resolve differences on migration and energy policy. “It is better not to govern than to govern badly.”
The euro slid in Asian trade overnight thanks to the uncertainty in Europe’s powerhouse nation. Against the yen, the euro was down 0.6% on the day to a two-month low and slipped 0.5% against the US dollar. It was down 0.43% against the pound at €1.125.
This may have ramifications for the EU negotiations if Merkel cannot form a government. Although we are technically negotiating with the EU we all know that Germany has the largest say and what Merkel wants Merkel gets. But if another election is called and Merkel isn't there who knows what the demands will be.