Coalition talks collapse in Germany, casting doubt on the country's political future

Christian Hartmann/Reuters

Angela Merkel.

• Talks about forming a three-party coalition government in Germany dissolved after the free-market liberal Free Democratic Party pulled out on Sunday.
• Without the FDP, Merkel may be forced to form a minority coalition or hold fresh elections just months after the last elections.
• New elections could impact the future of Brexit negotiations.

Talks about forming a three-party coalition government in Germany dissolved after the free-market liberal Free Democratic Party (FDP) pulled out on Sunday.

FDP leader Christian Lindner said there was no "basis of trust" with Chancellor Angela Merkel's conservative Christian Democratic Union/Christian Social Union bloc and the left-leaning Greens, the BBC reported.

"Today there was no progress but rather there were setbacks because targeted compromises were questioned," Lindner said. "It is better not to rule than to rule falsely. Goodbye!" he added.

If the FDP refuses to join the coalition, Merkel may be forced to form a minority coalition or hold fresh elections just months after the last elections.

In September, Germany voted to form a new government, and Merkel was elected for a fourth term as chancellor.

Merkel's conservative CDU bloc won 32.5 percent of the vote, according to Reuters, making them the largest parliamentary group.

The elections also brought a far-right party, the Alternative for Germany (AfD) into Germany's parliament for the first time since the 1960s. All other parties elected to the Bundestag refuse to work with the AfD, Reuters reported, because of its harsh stance on refugees and migrants.

New elections could impact Brexit talks

The second-largest party in parliament, the center-left Social Democrats (SDP), ruled out returning to a coalition government with Merkel's conservative bloc.

The prospect of renewed elections could have an impact on Brexit. SDP and opposition leader Martin Schulz said that Britain should be punished for leaving the EU.

If new elections turn in Schulz' favor, Brexit negotiations may be even tougher. Earlier this year, as president of the EU Parliament, Schulz accused ex-UK Prime Minister David Cameron of "taking a whole continent hostage for a party internal struggle" and threatened "the hardest Brexit possible," according to the Telegraph.

Alexandra Ma contributed to this report.