BERLIN (Reuters) - Chancellor Angela Merkel’s conservatives are rallying around her despite the failure of talks to form a three-way ruling coalition, buying her time in office and putting the onus on her Social Democrat rivals to break Germany’s political impasse.

German Chancellor Angela Merkel attends a CDU/CSU parliamentary group meeting at the Bundestag in Berlin, Germany, November 20, 2017. REUTERS/Axel Schmidt

Resolute conservative support for Merkel is significant, as some members of the Social Democratic Party (SPD) have said privately their price for a re-run of its ‘grand coalition’ with the conservatives would be Merkel’s head.

The collapse late on Sunday of the coalition talks, which followed an inconclusive Sept. 24 election, has plunged Germany into the worst political crisis since the end of World War Two.

President Frank-Walter Steinmeier, who is trying to broker a deal, is keenly aware the source of Germany’s international clout is its economic power and that businesses want a stable coalition soon to end the uncertainty and avoid another poll.

SPD leader Martin Schulz, whose party is the second biggest in Germany and was the junior coalition partner to Merkel’s conservative bloc in the last parliament, has insisted the SPD should rebuild in opposition after heavy losses in September.

But with Merkel secure for now at the helm of her Christian Democrats (CDU), the pressure shifts to the SPD to help form a coalition after the failure of the chancellor’s three-way talks with the liberal Free Democrats (FDP) and Greens.

Surveys suggest going to the polls again would deliver a similar outcome to September’s result. Furthermore, 58 percent of voters want Merkel to remain chancellor, an Infratest Dimap poll for broadcaster ARD showed this week.

‘NUMBER ONE’

While the SPD prevaricates, Merkel looks reasonable for trying to resolve the impasse.

“One thing is clear: Angela Merkel’s position in the CDU is very strong. She is our Number One,” David McAllister, a CDU executive committee member, told Reuters.

Her party believes she did all she could to forge a three-way coalition. Merkel’s efforts also improved ties with the CDU’s Bavarian allies in the conservative bloc, the Christian Social Union (CSU), which had been strained over immigration.

Another senior CDU official said there was no question of sacrificing Merkel as the party had no credible alternative.

A third senior CDU official, Volker Kauder, leader of the conservative parliamentary group in the lower house of parliament, said he hoped the Social Democrats would change their minds about rejecting another grand coalition.[nL8N1NT1PP]

Steinmeier is due to meet Schulz on Thursday at 1400 GMT as part of his efforts to help facilitate a coalition government and avoid more elections.

Asked about the possibility of the SPD supporting a Merkel-led minority government or entering a new grand coalition, an SPD spokesman pointed to Schulz’s meeting with Steinmeier and said, “then we will see what comes afterwards”.

A former SPD leader, Steinmeier is meeting leaders from all parties in parliament this week and wants them to make agreement on a new government possible “in the near future”.

SUCCESSION QUESTION

Only after a new government has formed is Merkel’s position likely to come under pressure - and even then, not immediately.

Her mentor, Helmut Kohl, and Konrad Adenauer, who led Germany’s rebirth after World War Two, are the only post-war chancellors to have ruled Germany longer than her.

Merkel, 63, only decided to run again last November after thinking long and hard. She said then she was seeking to stay on “if health allows”. In 1998, she was quoted as saying: “I don’t want to be a half-dead wreck when I leave politics.”

She appears in robust health, but given she has already held power for 12 years, questions will inevitably arise about who will succeed her before she is half way through any new four-year term. Potential successors are not circling just yet.

“She will have probably a year or so after a government is formed before the question of her succession becomes an overwhelming issue in German domestic politics,” said Jan Techau at the American Academy in Berlin.

“The moment that starts, her power will be greatly diminished.”

But first, Merkel must form a new government. If Steinmeier fails to convince the SPD to enter a new grand coalition, other options include a three-way coalition after all, a Merkel-led minority government, or new elections.

“Since snap elections won’t change relative strengths, my prediction is ... another grand coalition between the only two parties that have learned to compromise,” said Josef Joffe, publisher-editor of weekly Die Zeit.

Bild newspaper reported on Wednesday that some SPD deputies were now questioning their party’s rejection of a renewed grand coalition. [nL8N1NS1PN]

Changing course and teaming up with Merkel again may require a change of leadership at the SPD and there could yet be a shake out at a party conference in early December.

“The pressure needs to build up within the Social Democratic party,” said Techau.

He said Merkel should focus on being a responsible caretaker chancellor until a new government forms. “She just needs to play her own game well and then she can survive.”