BERLIN (AFP) - Chancellor Angela Merkel will make a last push on Sunday (Nov 19) to forge a government, in a twin battle to save her political future and avert fresh elections that could destabilise Germany and Europe.
Elections in September had left the veteran leader without a majority and weakened as some of her party's voters turned to the far-right AfD because of anger over her liberal refugee policy.
The disputed decision to let in more than a million asylum seekers since 2015 is also proving to be a stumbling block as she seeks an alliance with an unlikely group of parties spanning the left and right of the political spectrum.
Merkel's conservative CDU party and Bavarian allies CSU, the pro-business FDP and the Greens have given themselves until Sunday to clinch a deal.
Failing which, Germany would have to hold new polls in 2018 as the centre-left Social Democratic Party has ruled out returning to a coalition with Merkel after suffering a humiliating loss at September's elections.
Merkel, who has years of gruelling EU negotiations under her belt, now needs to see through what is likely the most important weekend of her political life.
"If she fails, the turbulence arising from a failure would quickly engulf her personally. This weekend is about the coalition AND the chancellor," said the best-selling Bild daily.
Frank Decker, political scientist at the University of Bonn, also had no doubt about what is at stake.
"It is absolutely in her interest for this government to come into being, because failure would spell her end," he told rolling news channel Phoenix.
A poll by Welt online, also found that 61.4 per cent of those surveyed said a collapse of talks would mean an end to Merkel as chancellor. Only 31.5 per cent thought otherwise.
'COALITION OF MISTRUST?'
Merkel, in power for 12 years, had initially set a Thursday deadline to decide if the motley crew of parties had found enough common ground to begin formal coalition negotiations.
But the talks went into overtime without a breakthrough.
After a day of negotiations on Saturday, co-chief of the Greens Simone Peter said there was movement but "often in different directions" - progress in some issues but backsliding in others.
The hot-button issue of immigration also remains unresolved, with the CSU and the Greens digging in their heels over their opposing demands.
The CSU, which lost significant ground in Bavaria to the AfD and faces a crucial state election next year, is anxious to limit the number of future arrivals at 200,000 a year.
But the Greens argue that refugees should be allowed to bring their family members to Germany.
Deep differences also remain on climate policy, where the Greens want to phase out dirty coal and combustion-engine cars, while the conservatives and FDP emphasise the need to protect industry and jobs.
The Greens would be wary of making concessions as it faces a party congress in a week's time, and rank-and-file members can still torpedo any deal that they deem unsatisfactory.
"There's still a whole mountain of issues to go through," said CSU chief Horst Seehofer on Saturday evening.
President Frank-Walter Steinmeier told broadsheet Welt am Sonntag that if negotiators are "battling hard over major questions like migration and climate change, that may not be a bad thing for democracy".
If the potential tie-up, dubbed a "Jamaica coalition" because the parties' colours match those of the Jamaican flag, comes together, it would be the first of its kind at the national level.
But questions abound about how stable it would be.
SPD parliamentary chief Andrea Nahles told the Funke media group she believes such an alliance would be "a coalition of mistrust, in which there is constant conflict, where each one plays his own cards, and where there isn't team work".
And political analyst Decker said he "wouldn't place a bet on whether this government will hold together for four years."