German president Frank-Walter Steinmeier this afternoon urged all the parties elected to the German parliament to work towards forming a government.
Chancellor Angela Merkel's future came into question last night after talks broke down between the CDU, the FDP and the Greens.
FDP leader Christian Linder broke off coalition talks, saying "it's better not to govern than to govern badly", raising the prospect of another election.
Steinmeier said: "All political parties elected to the German parliament have an obligation to the common interest to serve our country.
"I expect from all a readiness to talk, to make agreeing a government possible in the near future."
The Social Democrats have ruled out forming a so-called "grand coalition" with Merkel's CDU, saying they are not afraid of new elections.
A new election is a risk for Merkel, who could lose votes to the far-right Alternative for Germany (AfD). AfD has been gaining ground since Merkel opened the country's borders during the migration crisis.