German Chancellor Angela Merkel attends a two-euro-coin presentation in Berlin on January 29, 2015. Tobias Schwarz | AFP | Getty Images

German Chancellor Angela Merkel's position is looking weaker-than-ever and German business leaders are worried about it. Leading a fractious coalition government since voters delivered a hung parliament during Germany's last election in October 2017, Merkel's long-term leadership of Germany – one that has previously earned her the nickname of "Mutti," or "Mummy," - has looked increasingly shaky over the past year. After months of inconclusive talks to form a coalition government, the Social Democratic Party (SPD) agreed somewhat reluctantly in March to forming another coalition with Merkel's Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). The six-month old coalition is not a happy one, with infighting over immigration policy and, most recently, a very public dispute over a spy chief accused of harboring far-right views.

Coalition could collapse

German business leaders told CNBC that they're not too impressed by the political infighting that is preventing policy changes and economic reforms from taking place. Joachim Lang, director-general of the Federation of German Industries (BDI), told CNBC on Tuesday that the unstable political situation in Germany could get worse – with the possibility of the coalition breaking up. "The situation is very unusual but my gut feeling is that they (politicians) have realized the danger and they now have to make up their mind if it's better to stay in a grand coalition or to go their own ways and this decision will be made within a few weeks." The chancellor was dealt another political blow on Tuesday when lawmakers voted one of her closest parliamentary allies out of his role, raising further doubts over her political authority.

Volker Kauder, the head of the parliamentary group of Merkel's CDU was defeated by fellow CDU member of parliament Ralph Brinkhaus. The result was a surprise - Kauder had been in the role for over a decade and Merkel had clearly recommended that Kauder be re-elected. The overt rebellion has not gone unnoticed by Germany's media, print newspaper Die Welt headlined its Wednesday edition, "Revolution inside the CDU" while Der Spiegel's online version called it a "destructive vote of no confidence." Even public broadcaster Deutsche Welle's Editor-in-Chief Ines Pohl said in an op-ed on Tuesday that "Merkel's time is coming to an end."

'We must stop talking'