The uneasy alliance in Germany between the Social Democratic Party (SPD) and the Christian Democrats (CDU) of Angela Merkel, the Chancellor, has reached the point of no return. The resignation yesterday of Franz Müntefering as her deputy, for personal reasons (his wife is seriously ill), came as most Germans believed that his political position had become untenable. Not only has his party slipped way down in the polls, trailing the CDU by about ten points, but he has clashed repeatedly with the Left in the SPD and suffered a series of defeats on important economic issues.

Two years after the formation of the Grand Coalition, the odd couple are finding it increasingly hard to work together. The restless leftwingers of the SPD, eclipsed and outmanoeuvred by Mrs Merkel, never fully accepted the alliance with the CDU, believing that it would be used to push through many of the economic reforms initiated by the previous SPD Chancellor, Gerhard Schröder, which they bitterly opposed at the time. Their fears have been realised. Despite limited room for manoeuvre, she has, quietly and skilfully, managed to pass many of the measures essential to reining in the budget and making Germany more competitive. In this, she has been helped by Mr Müntefering, a former party chairman and Schröder ally. This, however, has only infuriated Kurt Beck, his ambitious left-wing successor as SPD chairman, who has repeatedly clashed with him over labour market policy.

On the CDU side, there is equal unhappiness. Mrs Merkel has won local respect for her handling of foreign policy, and is still personally popular. But many businessmen now accuse her of making too many concessions to her coalition partners and of being too ready to sacrifice reform for the sake of harmony. In particular, they have been angered by the Government's approval of a measure to extend the period of time that older Germans can receive full unemployment benefits, which they fear will lead more people to take early retirement and marks a retreat from necessary market reforms.

At the same time, a panel of economic analysts has warned the Government of a sharp slowdown next year, with forecast growth of 1.9 per cent compared with the 2.6 per cent expected this year. Both sides are straining to break the deal that has yoked them in uncongenial coalition. Mr Beck, fearful of setbacks in regional elections in January, wants to turn the SPD sharply to the left to revive support from core voters and outflank the Left Party. The CDU fears that Mrs Merkel is being drawn too much into compromise and is losing the appetite for further reform. This could damage her appeal in 2009. She recently insisted that she would not turn back from crucial reforms; but many fear that she will listen to those arguing that Germany's recent recovery allows her to focus on redistribution.

It is time to break the coalition. It has served its purpose, steadied the economy and passed overdue reforms. Mrs Merkel needs the freedom to pursue her market policies untrammelled by Social Democratic dogma or the chafing of unreliable partners. Calling early elections is awkward, but Helmut Kohl found a constitutional way to do so through a vote of confidence. She should use Mr Müntefering's departure to do the same. Germany would be the winner.