Chancellor Angela Merkel was left battling for political survival Monday after high-stakes talks to form a new government collapsed - plunging Germany into a crisis that could see it hold fresh elections.
Ms. Merkel had been forced to seek an alliance with an unlikely group of parties after September's elections left her without a majority.
But after more than a month of gruelling negotiations, the leader of the pro-business FDP, Christian Lindner, walked out of talks, refusing to forge a government with Ms. Merkel's conservative alliance CDU-CSU and ecologist Greens.
Voicing regret for the FDP's decision, Ms. Merkel vowed to steer Germany through the crisis.
The Greens' leaders also deplored the collapse of talks, saying they had believed a deal could be done despite the differences.
The negotiations, which turned increasingly acrimonious, had stumbled on a series of issues including immigration policy.
Merkel's liberal refugee policy that let in more than a million asylum seekers since 2015 had also pushed some voters to the far-right AfD, which in September elections campaigned on an Islamophobic and anti-immigration platform.
The parties also differed on environmental issues, with the ecologists wanting to phase out dirty coal and combustion-engine cars, while the conservatives and FDP emphasise the need to protect industry and jobs.
Ms. Merkel could now try to convince the Social Democratic Party, which has been junior coalition in her government since 2013, to return to a partnership.
But after the SPD suffered a humiliating loss at the polls, the party's top brass has repeatedly said its place was now in the opposition.
Ms. Merkel, who has been in power for 12 years, could also lead a minority government although she had signalled that she was not in favour of such instability.
Germany could likely therefore be forced to hold new elections.
But that is not without peril for Ms. Merkel, who would face questions from within her party on whether she is still the best candidate to lead them into a new electoral campaign.
