Crunch time for Merkel to build coalition or face new polls

The veteran leader, in power since 2005, won a September 24 vote without a clear majority for her conservative CDU/CSU bloc, largely because of the rise of the far-right Alternative for Germany (AfD), and must now build an unlikely alliance with the pro-business Free Democrats (FDP) and left-leaning Greens.

But their deep policy differences, especially on immigration and the environment, have hobbled the monthlong negotiating marathon, leading party leaders to miss a Thursday deadline and declare they will push on until Sunday evening.

Until and unless the motley crew of four parties, which spans the mainstream political spectrum, strikes a deal, Germany's government remains in effective limbo with Merkel serving as a caretaker chancellor.

If they fail, Germany would probably hold snap elections, which would leave Merkel increasingly exposed to a rising band of critics within her own ranks and could further bolster the anti-Islam AfD.

"There is the will to ensure that this political task succeeds, but it cannot succeed at any price," warned Alexander Dobrindt, a member of the CSU, the Bavarian party allied with Merkel, after arriving for the talks.

"Sunday at 18:00 (17:00 GMT), it's over. This weekend, we must decide," said FDP leader Christian Lindner.

Merkel, no longer deemed invincible after her poor election result, "now faces the most difficult task of her leadership so far," judged the Sueddeutsche Zeitung daily.

Albrecht von Luckem, a political scientist, told news channel NTV that already "the loser is Angela Merkel" because, rather than be seen as battling for ideas, she had "fought strategically to maintain power".

Hours after a 15-hour red-eye meeting ended at around 4:00 am yesterday, Merkel, the veteran of countless all-night EU summits, said that "the task of forming a government for Germany is so important that the effort is worthwhile".

Horst Seehofer, the embattled leader of the CSU, said that "we have the goal of finishing by Sunday" because the German people had the right to know whether or not a new government could be formed.

Looming over the political drama is the prickly issue of immigration, a hot-button topic since Merkel threw open German borders in 2015 to a mass influx of over one million asylum seekers.