The search for Germany's next government is entering a new phase. After the conservatives, Greens and neo-liberal FDP failed to agree on terms for a coalition, Chancellor Angela Merkel is rumored to be entering talks with the center-left Social Democrats (SPD). But whether these talks will succeed in forming a so-called grand coalition, or even begin in the first place, remains unclear.

If Merkel's Christian Democrats (CDU), along with their Bavarian sister party the CSU, can't make it work with the SPD, there are only two alternatives left. Either call Germans back to the polls in another nationwide vote, something that Merkel and other high-ranking politicians desperately want to avoid, or form a minority government.

What is a minority government?

Put simply, a minority government is one where the ruling party or coalition does not have the majority of seats in parliament. It requires a lot of cooperation between those in power and the opposition, because a majority in parliament — in Germany's case, the Bundestag — is required to pass legislation.

This means that a minority government must form many small issue-based coalitions. On new emissions regulations, the government would cooperate with one partner in parliament, but to push through changes in the tax code, it might have to look for another.

How would a minority government form in Germany?

If no majority coalition forms, the ball is in President Frank-Walter Steinmeier's court. He must pick a candidate for chancellor that is then put to a vote in the Bundestag. The president, which barring situations like the current coalition conundrum is a largely ceremonial role in Germany, is likely to choose the leading candidate of the party that won the most votes in the elections (Merkel in this case). But he doesn't have to.

If the candidate does not win an absolute majority, they will have to vote again two weeks later. If an absolute majority still isn't reached, they must immediately vote a third time. In round three, a relative majority is sufficient. The chancellor can then establish a minority government with the partner of their choice.

The pros and cons

Since the ruling party or parties would have to convince colleagues in the opposition to vote with them to get anything done, some experts consider a minority government a more cooperative endeavor than, say, a grand coalition, which would face relatively little opposition in the Bundestag.

But critics fear that reaching out to different parties on different issues could including teaming up with the right-wing populist Alternative for Germany (AfD), which entered the Bundestag for the first time following last September's elections, thereby legitimizing them to an unacceptable degree.

Germany also has a dark past when it comes to minority governments. In the years leading up to World War II, the country saw several unstable minority governments that ultimately collapsed before the Nazis took power.

A minority government also runs the risk of grinding to a standstill. If majorities prove difficult to come by, the government would not be able to pass any significant legislation.

Where are minority governments more common?

In other countries, governments without a parliamentary majority aren't such a big deal. In Denmark, 28 of the 32 governments since 1945 have lacked a majority. The hurdle for parties to make it into parliament lies at just 2 percent, as opposed to 5 percent in Germany, meaning more seats go to small parties.

"Democracy is not just government by a majority, it is also protecting minorities," Danish European Parliament member Jens Rohde told German public broadcaster Deutschlandfunk. "That works pretty well when you have many small parties and a minority government."

Sweden currently has a minority government led by the Social Democrats and Greens. When Prime Minister Stefan Löfven's first national budget proposal was promptly rejected after taking office in 2014, he decided to follow the opposition's plan for a year.

Spain has a minority government as well. Prime Minister Mariano Rajoy's conservative People's Party was tolerated by, among others, the Basque Nationalist Party — until the Catalonia crisis. The Basque Country is an autonomous region of Spain, and politicians there were unhappy about Rajoy's harsh response to the Catalan bid for independence. Now Rajoy works more closely with the Socialists in Spanish Parliament.