German Chancellor Angela Merkel said she'd prefer a new election to leading a minority government after coalition talks between her center-right Christian Democratic Union, the centrist Free Democratic Party, and the center-left Greens fell apart, per the BBC.

September's elections were initially viewed as a victory for Merkel as the CDU won by far the most seats. Now, unless she can patch together a coalition, it'll be up to German President Frank-Walter Steinmeier to call for another election which would take months. Steinmeier has said the parties have a responsibility to come to an agreement.

Why it matters: The situation puts Merkel's position in jeopardy and risks political instability in the European Union's biggest member as Brexit negotiations ramp up. Another election could also benefit the far-right Alternative for Germany, which had big gains in September's election on an anti-immigrant, anti-Islam platform.