Merkel has 'chance' to form German government but must compromise more, says FDP leader

Key Points
  • Talks to form next German government have only just begun.
  • FDP says Finance Ministry post not crucial to their participation
  • The Green party makes up the third strand of the "Jamaica Coalition"
People want a leader who understands Average Joe's problems: German lawmaker
People want a leader who understands Average Joe's problems: German lawmaker

The task of forming the next German government using an untried coalition looks a tricky task for long-time leader Angela Merkel.

A mooted three-way pact involving the CDU/CSU, Greens and FDP has been dubbed a "Jamaica" coalition because the parties' colors — black, yellow and green — match those of the Caribbean nation's flag.

Exploratory talks between parties began last Wednesday and could continue into 2018 if a quick agreement cannot be found.

Otto Fricke, member of the federal executive board of Germany's FDP, told CNBC Monday that talks were going well enough for now.

"Right now, they have come along as people. If they come along as politicians we will see," said the budget spokesperson.

Fricke added that, as it stands, Merkel has a chance of forming a government.

"If you've lost that much of voters then, of course, you are weakened," he said. "But it is always a question at the end of how your own party is supporting you and that is something where the CDU has been very strong in the last few years.

"If you see the sister party CSU being a little more calm than they were before the election, she has a chance."

How do German elections work?
How do German elections work?

The FDP representative cautioned, however, that a new three-way coalition would take work.

"She (Merkel) has to a do a lot more to compromise. And none of those that are now in talks with her believe that everything is fine just because you have a coalition treaty."

The FDP is an economically liberal party that wants to see less money in Germany allocated to state support and a corresponding reduction in personal taxes.

In negotiations, Fricke said his party was not insisting on the role of finance minister.

"We don't care what party the finance minister is coming from, we care about what kind of politics he is going to make. So no, I think it's always wrong to go into coalition talks to say I want this post or this ministry. At the end this makes you lazy," he said.

Fricke dismissed media claims that the new coalition would cost 100 billion euros ($117.5 billion) in policy demands as "completely stupid."