BERLIN — Chancellor Angela Merkel of Germany faced the greatest crisis of her political career on Monday, after late-night negotiations to form a new government collapsed, raising the prospect of a snap election.
The chancellor said she remained hopeful about forming a majority government. But if forced to choose, she said she would prefer to go through new elections rather than try to lead a minority government.
“I don’t want to say never, but I am very skeptical, and believe that new elections would be the better way forward,” the chancellor told the public broadcaster ARD.
The uncertainty raised new doubts about the political longevity of Ms. Merkel, considered perhaps the West’s most ardent defender of democratic values and freedoms.
At a time when the European Union is facing a host of pressing problems, from Brexit negotiations with Britain, to the rise of right-wing populism, to separatism in Spain’s Catalonia region, the possibility of political instability in a normally reliable Germany sent tremors through the continent.
The collapse of talks reflected the deep reluctance of Ms. Merkel’s party and each of the prospective coalition partners to compromise over key positions, especially on immigration, climate and tax policies.
“There is no coalition of the willing to form a government,” said Thomas Kleine-Brockhoff, director of the Berlin office of the German Marshall Fund. “This is uncharted territory since 1949. We’re facing a protracted period of political immobility. Not only is this not going to go away soon, there is no clear path out.”
Calling new elections is not a straightforward procedure in Germany. Written with the unstable governments of the 1920s and 1930s and collapse of the Weimar Republic in mind, the German constitution includes several procedural hurdles that would insure a prolonged and difficult process.
Some were quick to link Germany’s disorder to a broader crisis of democracy in the West. “The unthinkable has happened,” said Christiane Hoffmann, deputy head of the Berlin bureau of Der Spiegel, a German magazine. In that sense, she said, “This is Germany’s Brexit moment, its Trump moment.”
Others said Germany’s troubles were in many ways just a sign that the country was becoming more normal, not less. Having had only four chancellors since 1982, the country has known only a string of centrist governments that governed by consensus.
The crisis erupted less than three months since the last election, which brought the right-wing Alliance for Democracy, or AfD, into Parliament, and in some ways represented the return of politics to a country long deprived of debate and policy disagreements.
“It’s just another step in the long learning of democracy of Germany since World War II, going from a very stable proportional system to something more messy,” said Henrik Enderlein, dean of the Hertie School of Governance in Berlin.
The bigger question, he said, was whether Mrs. Merkel’s pragmatic governing style had reached its limit in an era where people crave the clash of a wider spectrum of policies. “Her über-pragmatism is reaching its end,” he said. “It’s hard to see a scenario where she returns to her previous position of power.”
Ms. Merkel met in private on Monday with President Frank-Walter Steinmeier, who as head of state is charged with trying to break the deadlock in coalition talks. He could appoint a chancellor to lead a minority government or, failing that, call for new elections.
The potential for instability in Germany would be a major blow to the European Union. Ms. Merkel has been the region’s dominant political figure of the past decade, credited with guiding the bloc through the 2008 financial crisis and, more recently, providing a powerful counterpoint to populists across the Continent and beyond.
Financial markets reacted calmly to the turmoil in Berlin, calculating that the German economy could power through the uncertainty. After opening lower, the DAX index of major stocks closed the day higher. The euro fell slightly.
But some economists warned that the longer term effects could be more severe. A weak government might be unable to agree on needed improvements to infrastructure and the education system, for example.
“The economic situation is very good,” Christoph M. Schmidt, chairman of the German Council of Economic Experts, said in a statement. “But over the mid and long term there are big challenges, especially the demographic shift, digitalization, sensible development of the European Union, and climate change.”
The political instability stems from the elections in Germany on Sept. 24, when Ms. Merkel’s Christian Democrats finished first. But their share of the overall vote dropped significantly, while the far-rightAlternative for Germany scored a record vote, entering Parliament for the first time as the third-biggest grouping.
Even so, political analysts had expected Ms. Merkel to form a new coalition government that would have allowed her to remain as chancellor. That may still happen, but it will be harder now, and it is unlikely to happen soon, experts say.
Elsewhere in Europe, the possibility of a weakened Ms. Merkel and of an inward-looking Germany alarmed some leaders. The chancellor canceled a meeting in Berlin with Prime Minister Mark Rutte of the Netherlands. In Paris, President Emmanuel Macron of France said that Ms. Merkel’s difficulties were a serious hurdle to the partnership between their two countries.
France has “no interest in a worsening of the situation” in Germany, Mr. Macron said in a statement on Monday. “Our wish is that our main partner, for the sake of Germany and Europe, remains strong and stable, so that we can move forward together,” he added.
Even if Ms. Merkel’s problems leave Mr. Macron as Europe’s de facto strongest leader — with weak domestic opposition in France, a strengthening economy, and a good record so far on driving through economic overhauls — the French president had been counting on Ms. Merkel as an ally in his push to make changes to the European Union.
Mr. Macron will be aware that his agenda for the bloc, which includes a common defense force, a strengthened euro, and a joint finance minister, stands no chance without German backing.
Ms. Merkel had originally set Friday as the deadline for reaching an agreement with the Free Democrats, the Greens, and the Christian Social Union, which forms a conservative bloc with the chancellor’s Christian Democrats. From the outset, all of those parties had differed markedly on key issues, notably migration and climate policies, resulting in strained talks that led to open sniping.
After they agreed to take talks into overtime, negotiators and party leaders failed to produce any breakthroughs over the weekend, and the Free Democrats quit the talks.
Ms. Merkel could try to approach the Social Democrats about forming a coalition. But the center-left party has served as the junior coalition partner to the Christian Democrats since 2013 and on Monday, the party’s leader, Martin Schulz, said his group had no interest in another round.
As for new elections, the president can set the process in motion by proposing Ms. Merkel as chancellor, which would be put to a vote in Parliament.
If Ms. Merkel were to win a majority in the first round of voting, the president could then name her as chancellor. If not, lawmakers would vote again, within 14 days.
If Ms. Merkel failed to win a majority in a second vote, then lawmakers would vote a third time and the candidate with the most votes would win. At that point, the president could name that person chancellor or simply dissolve the Parliament and order new elections, which would take place within 60 days.
But there is no gurantee that elections would improve the situation: Recent opinion polls predict that a new vote would bring little change, compared to the result in September. A Forsa poll released last week showed Ms. Merkel’s conservatives at 32 percent, the Social Democrats on 20 percent, the Free Democrats at 12 percent, the Greens 10 percent and the AfD 12 percent.
Some worry that the AfD could benefit from the current chaos and increase its share of the vote. But even if it did, that share remains far below that of populist movements in other countries.
“Germany is not leaving the EU and it did not elect Donald Trump,” said Mr. Kleine-Brockhoff. “It was unable to form a government on its first attempt. That’s bad. It causes instability. But it’s not the end of the world.”