Chancellor Angela Merkel was left scrambling for ways to drag Germany out of crisis today after high-stakes talks to form a new government collapsed, potentially forcing Europe's top economy into snap elections. Germany now faces weeks, if not months of paralysis with a lame-duck government that is unlikely to take bold policy action. 
With no other viable coalition in sight, Germany may be forced to hold new elections that risk being as inconclusive as September's polls. Merkel, whose liberal refugee policy has proved deeply divisive, had been forced to seek an alliance with an unlikely group of parties after the ballot left her without a majority. But following more than a month of gruelling negotiations, the leader of the pro-business FDP, Christian Lindner, walked out of talks overnight, saying there was no "basis of trust" to forge a government with Merkel's conservative alliance CDU-CSU and ecologist Greens.

Chancellor Angela Merkel was left scrambling for ways to drag Germany out of crisis today after high-stakes talks to form a new government collapsed, potentially forcing Europe's top economy into snap elections. Germany now faces weeks, if not months of paralysis with a lame-duck government that is unlikely to take bold policy action. 
With no other viable coalition in sight, Germany may be forced to hold new elections that risk being as inconclusive as September's polls. Merkel, whose liberal refugee policy has proved deeply divisive, had been forced to seek an alliance with an unlikely group of parties after the ballot left her without a majority. But following more than a month of gruelling negotiations, the leader of the pro-business FDP, Christian Lindner, walked out of talks overnight, saying there was no "basis of trust" to forge a government with Merkel's conservative alliance CDU-CSU and ecologist Greens.