Lindner said that beyond the major sticking points, the three parties could not build enough mutual trust needed to ensure that the next government is stable for the whole four-year legislative period.
The DIHK Chambers of Industry and Commerce said a prolonged period of uncertainty would be bad for the economy.
“There is the danger that work on major issues for the future of our country will be delayed for a prolonged period of time,” DIHK President Eric Schweitzer wrote in an email. “German companies must now prepare for a possibly long period of uncertainty. This is always difficult for the economy.”
Merkel was weakened after the election 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.
There is little appetite for a second vote, especially as the main parties fear that the AfD would win more than the almost 13 percent of votes it secured in September.
Failure to form a government in Europe’s largest economy could have implications for everything from euro zone reforms to European Union policy on Russia and Turkey.
Merkel, 63, and in office since 2005, has used her power to broker compromises on bailout aid for Greece within the single currency bloc and to keep in place EU sanctions against Russia over its backing of separatists in eastern Ukraine.