Chancellor Angela Merkel may be running out of road after 12 years at the country's helm.
With attempts to form a fourth-term government in disarray, Merkel's once unquestioned ability to steer Europe is waning as the region's biggest economy heads into uncharted waters and possibly a protracted political stalemate. Markets reacted with unease, with the euro slumping the most in three weeks against the dollar.
The breakdown in coalition talks late Sunday — amid disputes over migration and other policies between a grab-bag of disparate parties — raised the prospect of fresh elections, which probably will be held next spring. Relying on a minority administration with shifting alliances to pass legislation would run counter to Merkel's promise to provide a stable government.
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