German Chancellor Angela Merkel confirmed today she would start talks with liberals and Greens to try to form a new coalition government after last month's election.
Merkel won a fourth term in the September 24 vote but the far-right Alternative for Germany (AfD) poached one million votes from her conservative bloc, leaving her without an obvious coalition to lead Europe's largest economy.
She has already said she would seek exploratory talks on forming an alliance between her CDU/CSU bloc and two smaller parties, the pro-business Free Democrats (FDP) and the ecologist Greens.
Merkel said in a speech in the eastern city of Dresden today that the negotiations would be "difficult", but added: "I hope the coalition will fall into place."
Such an alliance -- which would be unprecedented in Germany at the national level -- has been dubbed the "Jamaica coalition" because the colours of the three parties match the black, yellow and green of the Caribbean country's flag.
The talks could start in earnest in the next few days but the formation of the government is not expected before the end of the year.
Tomorrow, Merkel and leaders of her Christian Democratic Union (CDU) are due to meet in Berlin with their Bavarian allies the Christian Social Union (CSU) to agree on a joint programme for the next four years.
The CDU/CSU bloc scored 33 percent in the September vote, its worst outcome since 1949, while the Social Democrats, her junior partners for eight years, were crushed with just over 20 per cent and vowed to go into opposition.
"It is clear that in the near future, the Social Democrats of the SPD are not able to govern at the national level," Merkel said.
However, the election marked a breakthrough for the anti-Islam AfD which won 12.6 per cent, while the FDP won 10.7 per cent and the Greens 8.9 per cent.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)