“This is a night of deep reflections about what’s next for Germany,” a visibly exhausted Merkel said Monday at around 1 a.m. local time.
Later on Monday, Steinmeier urged all parties to continue to negotiate possible coalitions, indicating that the struggle for a new government could drag on.
For now, Merkel's government will continue to operate as a caretaker administration, and all ministers who were in place before the September elections will maintain their positions. There are a number of possible scenarios for what could happen next, but none of them appear to be stable, long-term options.
Option 1: A grand coalition
During her 12 years in power, the Social Democrats — Germany’s second mainstream party, which is to the left of the CDU — were part of the government for eight years.
But when the Social Democrats suffered a major setback in elections last September, they partially blamed the defeat on Merkel. In response, the party leadership immediately ruled out forming another grand coalition with the CDU, even though a majority of Germans remained in favor.
To some, however, the Social Democrats have become too indistinguishable from their more conservative mainstream competitor. Core issues usually believed to play into the hands of the Social Democrats, such as social justice and fair wages, have become less of a concern over the last four years.
Critics argue that the party should develop a clear profile again as an opposition movement, but forcing the country into new elections by refusing to form a coalition may turn out to be an even bigger mistake. Social Democratic leader Martin Schulz is widely considered to have failed as a candidate. New elections could result in an even more disastrous electoral outcome than in September.
Option 2: The FDP comes back to the negotiating table
After the Social Democrats rejected another grand coalition, Merkel was left with only one alternative: a coalition with the pro-business Free Democrats and the Greens party.
The Free Democrats had only just reentered the Bundestag, Germany’s lower house of parliament, after suffering a major defeat four years ago. Like the Social Democrats’ setback, that defeat was largely blamed on the previous coalition with Merkel, in which the Free Democrats were largely unsuccessful at achieving their own goals.
This may partially explain the party’s new reluctance to form another coalition with Merkel.
Regardless, the Free Democrats were widely accused of opportunism on Monday morning. Both the Greens party and Merkel’s CDU and the CSU argued that a compromise was within reach, and observers pointed out that the Free Democrats had largely been given their key campaign promises. Hence, the Free Democrats may still be pressured into returning to the negotiating table.
Ultimately, though, the Jamaica coalition — named after the yellow, green and black colors of the possible coalition partners — never appeared to be a stable option given the parties’ vast policy differences. The abrupt walking-out of the Free Democrats on Sunday night has likely destroyed the remaining trust among those partners needed to form a government.
Option 3: A minority government
Given that both options for a viable coalition are unlikely, the new Bundestag will probably go through a weeks-long voting process instead. Members of parliament will try to agree on a chancellor proposed by the German president. That proposed candidate will likely still be Merkel.
In the first ballot, an absolute majority is needed for a chancellor to be elected. If lawmakers cannot agree on a new leader, that procedure will be repeated several times. In a final step, parties can then propose their own candidates. The candidate with the most votes will become chancellor without having to reach an absolute majority.
Theoretically, Merkel — or another leader — could then rule in a minority government. For instance, the Greens, the CDU and the CSU could form a coalition and rely on the voluntary support of either the Social Democrats, the Left party, the right-wing Alternative for Germany or the Free Democrats.
A minority coalition government on a national level would be unprecedented in Germany, however.
Option 4: New elections
It would be up to Steinmeier, the president, to call new elections to avoid such an unstable scenario. In the past, both parties and presidents have gone to great lengths to avoid election reruns, given the country’s consensus-based constitution that pressures parties into finding common ground.
Germany is Europe’s leading economy and a key negotiating partner in the ongoing Brexit talks. New elections would prolong a state which has now lasted for more than five weeks and has turned the German government into an empty shell without long-term policy objectives.
Whether a rerun would substantially change the Bundestag’s current composition, which has thrown the country into political turmoil, is also far from certain.