German President Frank-Walter Steinmeier called on party leaders to moderate their positions and try again to form a government.
Negotiations between Chancellor Angela Merkels's Christian Democratic Union (CDU) and the Free Democrats (FDP) and the Green Party ended on Sunday when FDP leader Christian Linder left the talks. Neither side had any comments after the meeting.
Martin Schulz, the head of the current coalition partner Social Democrats (SPD) has emphatically stated that his party will leave the government after its disastrous 20 percent showing in the September 24th general election.
The FDP, a pro-business classically liberal party and the third ranking vote total had been the most likely coalition partner. But the FDP was badly burned in its previous coalition from 2009-2013 losing all representatives in the Bundestag in the 2013 election when its votes fell below the mandatory 5 percent.
Chancellor Merkel has said she will not attempt a minority government leaving only new elections if none of the potential coalition partners change their minds.
The euro has suffered little from Angela Merkel's political difficulties. Since its close on September 22nd, the Friday before the elections at 1.1948, it has shed 1.8 percent against the dollar. But that small drop comes at the end of a two quarter rally that took the united currency from a low of 1.0568 in early April to 1.2093 on September 8th, a 14.4 percent gain.
Ms Merkel may be in the weakest political position of her career, but you would never know it from looking at the euro.
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