International Finance

German coalition government talks fail

Chancellor Angela Merkel’s term might end before the completion of the term

The talks on forming a coalition government in Germany have crumpled. The euro crashed down a two-month low against the yen soon after the Free Democratic Party (FDP) leader Christian Lindner stated shortly before midnight on Sunday that the party was no longer a part of it.

Chancellor Angela Merkel had been trying to build a coalition government amid Christian Democratic Union (CDU), Christian Social Union (CSU), FDP and the Green party. With FDP taking its steps back, not only has the formation of the coalition government stumbled, but also has put Germany step into political jeopardy and Merkel’s continual of fourth term in troubled waters.

Against the yen, the euro went down 0.6% and fell 0.5% against the US dollars. It was as low as 0.43% against the pound at €1.125.

Migration has been a topic of political controversy during the coalition talks. It was an intense negotiation of a month after which Linder waved his party off the discussions of the coalition government. Lindner who considers there is ‘no basis of trust’ between them, said, “The four discussion partners have no common vision for modernisation of the country or common basis of trust. It is better not to govern than to govern badly.”

While formally announcing the failure of the coalition talks and the next steps, Merkel said, “I will inform the German President about the state of affairs and then we have to see how this develops further.

“It’s a day of deep reflection of at least how to go forward in Germany. As chancellor, I will do everything to ensure that this country is well-managed in the difficult weeks to come,” she assured.

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