Germany's president appealed to political leaders Monday to rethink their positions and put together a new government for Europe's biggest economy after coalition talks collapsed. But there was little immediate sign that his call would be heeded, and a new election looked likely.

Conservative Chancellor Angela Merkel spent four weeks haggling with the pro-business Free Democrats and the traditionally left-leaning Greens on a new, untried governing coalition, until the Free Democrats walked out Sunday night.

Her partners in the outgoing government, the centre-left Social Democrats, said Monday they won't budge from their refusal — repeated time and again since they slumped to a disastrous defeat in Germany's Sept. 24 election — to join a new Merkel administration. No other politically plausible combination of parties has a majority in parliament.

"We now face a situation that we haven't had in the history of the Federal Republic of Germany, so in nearly 70 years," President Frank-Walter Steinmeier told reporters after meeting Merkel. It is Steinmeier who will have to decide whether to pave the way for a minority government or a new election,

"This is the moment at which all parties should pause and reconsider their position," he said. "I expect from everyone readiness to talk, in order to make the formation of a government possible in the foreseeable future."

Steinmeier said he will meet the leaders of all the parties involved in the failed talks, as well as others, in the coming days.

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German President Frank-Walter Steinmeier briefs the media after a meeting with German Chancellor Angela Merkel at Bellevue Palace in Berlin on Monday. (Markus Schrieber/Associated Press)

It's likely to be a while before the situation is resolved.

If neither the Free Democrats nor the Social Democrats budge, that would leave a minority government — not previously tried in post-Second World War Germany — or a new election as the only options. The German constitution doesn't allow parliament to dissolve itself, so the decision lies with Steinmeier.

But Merkel said Monday she didn't think a minority government was a realistic alternative.

"I don't have a minority government in my plans," Merkel said in an interview with ARD public television's Brennpunkt program. "I don't want to say never today, but I am very skeptical and I think that new elections would then be the better way."

'Red card' from voters on repeat coalition

To get to either destination, the president would first have to propose a chancellor to parliament, who must win a majority of all lawmakers to be elected. Assuming that fails, parliament has 14 days to elect a candidate of its own choosing by an absolute majority. And if that fails, Steinmeier would then propose a candidate who could be elected by a plurality of lawmakers.

Steinmeier would then have to decide whether to appoint a minority government or dissolve parliament, triggering an election within 60 days. Merkel's two-party Union bloc is easily the biggest group in parliament, but is 109 seats short of a majority.

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Chairman of the Free Democratic Party Christian Lindner (centre) withdrew his party from the coalition talks. (Hannibal Hanschke/Reuters)

A new election may produce an equally awkward situation, however, with polls so far suggesting results would be similar to last time.

Merkel said after the talks collapsed that her conservatives had left "nothing untried to find a solution." She said that she "will do everything to ensure that this country is well-led through these difficult weeks," but didn't immediately say anything about her own future.  

The Social Democrats' leader, Martin Schulz, insisted Monday that the outgoing government — all of whose members lost support in September — had "got the red card" from voters. He said his party is "not available" for a repeat, even without Merkel in charge, and that a minority government "is not practicable in Germany."

Peter Tauber, the general secretary of Merkel's Christian Democratic Union, told Deutschlandfunk radio that politicians shouldn't "throw it back to our citizens and say, 'vote again, we didn't agree."'

The nationalist Alternative for Germany, which emerged from September's election as the third-biggest party, welcomed the coalition debacle.

"Merkel has failed," co-leader Alexander Gauland said. "We think it's time for her to go."

Meanwhile, the blame game was in full swing.

The Free Democrats' leader, Christian Lindner, defended ending the talks, telling reporters "we would have had to abandon our fundamental positions" to join a government with the conservatives and Greens. He said proposals on migration policies, financial issues and education were too far removed from the "change in policies" Germans voted for. 

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Migrants walk along a street after crossing the Austrian-German border from Achleiten, Austria, in Passau, Germany, in 2015. German Chancellor Angela Merkel has been under constant pressure for her handling of the refugee crisis. (Michaela Rehle/Reuters)

Social Democrats leader Schulz said the negotiating parties had put Germany "in a difficult situation." Wolfgang Kubicki, a senior Free Democrat, said that "if there are new elections, it's because of the Social Democrats, not because of us."

Immigration was the main sticking point in the negotiations. Merkel's Christian Democrats and their Christian Social Union (CSU) Bavarian allies had demanded a yearly cap on the number of asylum seeker that Germany accepts each year, a measure rejected by the Greens. There was also discord over conservative proposals to limit the right of some accepted asylum seekers to bring in immediate family members.

Failure to form a government in Europe's largest economy could have implications for everything from eurozone reforms championed by French President Emmanuel Macron to the shape of relations with Britain after it leaves the EU.

Other European countries expressed concern, but Macron said Monday that "it's not in our interest for it to get tense."

Steinmeier underlined those worries.

"There would be incomprehension and great concern inside and outside our country, and particularly in our European neighbourhood, if the political forces in the biggest and economically strongest country in Europe of all places didn't fulfil their responsibility," he said.

With files from Reuters