- The CDU and the Socialist Democrats (SPD) agreed Friday that there is enough common ground between them to work together and form a government
- There are doubts that Merkel has the political strength to remain in power for the full term
- If Merkel loses some of her authority, this could have repercussions at a European level
Germany may be a step closer to forming a new government, but there are doubts that Chancellor Angela Merkel will be its leader for the full mandate, a political analyst told CNBC on Monday.
Following failed coalition talks between Merkel's German Christian Democrats (CDU), the Greens and the Free Democratic Party (FDP), the CDU and the Socialist Democrats (SPD) agreed Friday that there is enough common ground between them to work together and form a government.
However, Nina Schick, director of data and polling at Rasmussen Global, doubts that Merkel has the political strength needed to remain in power for the full term.
"In Germany, there's certainly awareness that Merkel won't be serving a fifth term, and whether or not she will even complete her fourth term, there's a question mark over that. Germany needs new political blood," she told CNBC.
The SPD is hosting a party conference Sunday, when approval should be given for official coalition talks to begin. But analysts do not expect a government to be sworn in before Easter.
"Once this stage (the party conference) has been passed, it is very unlikely that the coalition talks will still fail," Carsten Brzeski, chief economist for Germany and Austria at ING, said in a note Friday. "The current paper is already too detailed for any huge surprises to happen."
Brzeski added, however, that there have been surprises in German politics over the last few months, indicating that there could be new unexpected developments between the CDU and the SPD.
Nonetheless, the potential coalition government will likely prove complicated for Merkel. "The difficulties to reach the current compromise show that any new grand coalition will not be the result of love at first sight, but rather a coalition of convenience," Brzeski said.
The CDU's talks with the SPD are only taking place because Merkel's previous attempt to form a coalition failed. Furthermore, the SPD had to retract its campaign promise that it would not join forces with Merkel.
"I think no matter what the outcome of the coalition agreement is, or even if there is no coalition agreement and we are looking at a minority government or snap elections, Germany is heading in a certain direction," Schick said, noting that not only will Merkel be in her fourth term, but also her 12th year in office.
"If you look at the precedents (of previous chancellors)...they often struggled in their fourth year," she said. "So no matter what happens, Merkel is diminished."
"How badly she is diminished really depends on the outcome of the coalition talks. So I foresee a situation, which is quite plausible, where she might actually have to step down before she served the full remainder of her term," Schick said.
If Merkel, who is often seen as a main driving force in European politics, loses some of her authority, this could have repercussions at a continental level.
"Merkel's diminished power means that any grand step forward towards euro zone integration is hampered," Schick said.