It is better not to rule than to rule falsely. Goodbye!

Those were the words of Christian Lindner, leader of the Free Democrats (FDP) party in Germany as he walked out of talks with Angela Merkel’s Christian Democratic Union (CDU). This was effectively the last shot that Merkel had at forming a ruling coalition with a safe majority in the Bundestag. This leaves Merkel in perilous territory and no one is certain what happens next. But one thing seems certain, and that’s the new reality of a Germany which is no longer in the untouchable grasp of Merkel’s former CDU controlled alliance which has held sway for nearly two decades.

The reasons for the fracture will sound familiar to followers of American politics.It’s all boiling down to questions over immigration, national identity and national security.(Reuters)

German Chancellor Angela Merkel’s efforts to form a three-way coalition government that would secure her a fourth term hit a major setback on Sunday after a would-be coalition partner pulled out of exploratory talks, citing irreconcilable differences.

The pro-business Free Democrats (FDP) unexpectedly walked out of the talks with Merkel’s conservatives and the Greens, saying that the three parties could not find compromises on key issues like immigration and the environment.

Merkel could seek to form a minority government with the Greens, or new elections will be called…

Merkel was weakened after an election in September as voters angry with her decision in 2015 to open Germany’s borders to more than a million asylum seekers punished her conservatives by voting for the Alternative for Germany (AfD) far-right party.

In the past, Angela Merkel didn’t really need to worry about the rest of the smaller political parties in her country. If the CDU had the support of the social democrats in the SDP they would once again have had a majority, but that idea has been repeatedly rejected since the last round of elections. This forced her to team up with the Greens, but they only control roughly 11% of the seats in the Parliament so Merkel was counting on cutting a deal with Free Democrats. Now that they’ve walked out, there is no clear majority in sight.

So what went wrong? The BBC has some good background on that subject, but the biggest driving factor was immigration. Germany has already been forced to enact a moratorium on most migrants entering the country, but there’s been a push among Merkel’s supporters to allow family members of immigrants already in the country to join them. That’s a very unpopular idea with not only the right wing AfD, but several of the other parties that saw significant gains in Parliament this year. People are frustrated with open borders, rising crime and threats of more terrorist attacks.

So where do they go from here? That’s the million dollar question. If Merkel attempts to create a minority government with just the support of the Greens she will go into each and every vote in Parliament scrambling to find extra votes from a shifting patchwork of wary opponents. But the only other option is to call for another round of elections. The most recent polling indicates that the CDU could take even more of a beating in that scenario and possibly see Merkel out of the Chancellor’s office entirely.

Germany just finished one of the most bruising election cycles in recent memory. Merkel may have won that battle, but she’s now poised to lose the longer war. And that could signal the beginning of a very different era in European politics.