Berlin - Talks on forming a coalition government in Germany have collapsed, leaving Angela Merkel facing her biggest challenge in 12 years as chancellor. The free-market liberal FDP pulled out after four weeks of talks with Mrs Merkel's CDU/CSU bloc and the Greens. FDP leader Christian Lindner said there was "no basis of trust" between them. What happens next is unclear, but Mrs Merkel is due to meet President Frank-Walter Steinmeier, who has the power to call elections. The German stock market slipped slightly on the news that the talks had collapsed. Mrs Merkel said she regretted the collapse, adding she would meet the German president later on Monday to formally tell him negotiations had failed. Her bloc won September's poll, but many voters deserted the mainstream parties. "As chancellor, I will do everything to ensure that this country is well managed in the difficult weeks to come," she said. The parties involved in the talks are reported to be deeply divided over tax, asylum and environmental policies. Although rumours had spread that a deal was close, the FDP's leader emerged from the venue in the middle of the night surrounded by his party colleagues and told reporters that the party was leaving the process. He said that while the FDP knew it could not steer the course of the entire republic with just 11% of the vote, the parties involved in talks had "no shared vision" of how the country should be modernised, and four weeks of talks had left them with "many inconsistencies, unanswered questions and conflicts". "It is better not to rule than to rule badly. Goodbye!" Mr Lindner said. The co-leader of the Greens, Simone Peter, said the FDP had been "irresponsible, dubious and calculating".
Her party colleague Katrin Göring-Eckardt said the Greens had been "ready to talk" and found a "much greater understanding" with the CDU and FDP through the talks, especially over migration politics, climate change and agriculture. Mrs Merkel blamed differing cultures and styles for the collapse but said: "We think we were on a path to finding a solution." (FA)