For the past eight weeks, German Chancellor Angela Merkel has been trying to reach a coalition agreement with three smaller parties in the federal parliament. In federal elections held on September 24, Merkel’s Christian Democrats (CDU) won the most seats in the federal parliament but failed to win enough for an outright majority. With her previous coalition partners, the Social Democrats, declining to enter government again as they seek to renew and rejuvenate Germany’s oldest political party, Merkel has been forced to try and reach some sort of governing consensus with three junior parties.

On Sunday, the pro-business Free Democratic Party, said there was little prospect of reaching an agenda for government with the Greens and the Bavarian sister party of the CDU, the Christian Social Union (CSU). The withdrawal means there is no chance that Merkel can make up enough numbers to form a majority administration with the Greens and CSU, and unless the Social Democrats reverse their position, the chancellor faces the prospect of running a minority government. Given that the far-right Alternative for Germany polled 13.5 per cent in the September elections and now has some 90 members in the Bundestag, Merkel is loathe to face a new election now. She is also loathe to turn to the AfD for support.

The smaller prospective parties have failed to reach an agreement on policies that would advance the Green’s climate change agenda or on other demands for a harder line against refugees. While uncertainty is unwelcome, Merkel may have to rule from a minority position. That’s more acceptable now than new federal elections in which the AfD might gain even more support.