Angela Merkel is struggling to form a Government and the Social Democrats (SPD) have now agreed to hold talks with Merkel’s Christian Democrats (CDU).
The German leader could face another round of elections if she cannot form a coalition.
Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, Taxation and Customs admitted that the feeling around Europe is fragile in Germany.
Speaking to Bloomberg, he said: “There is something interesting about the election itself.
“That you can have full employment, you can have a huge success economically and still people wandering and a split vote.
“And also an extreme right party coming in inside Parliament which is the first time since World War 2.
“That proves that the feeling among the voters is still very fragile about Europe and about the economy.”
Mr Moscovici, however, backed Mrs Merkel to continue to lead Germany forward.
He said: “Yes there is a caretaker Government, but there is a Government and there is a strong leader who is Mrs Merkel.”
The comments come as a professor has claimed that the populist movement in Europe is not over, and Austria’s new coalition has provided more evidence.
Matthew Goodwin, a Professor of Politics, pointed out the shift in beliefs on the continent, in the wake of new Austrian chancellor Sebastian Kurz’s inauguration, following a deal with the country’s right-wing Freedom Party (FPO), led by Heinze-Christian Strach.
Mr Goodwin said: “The populist and centre-right are thriving because they understand that voters are not solely concerned about GDP and economic growth.
“Austria’s sharp rightward turn is merely a symptom of a much broader challenge to the EU that is deep and growing.
“Like Kurz and Strache, across the continent, an assortment of conservative, Eurosceptic and populist parties are seeking to take control of the EU project and push it in a fundamentally different direction, if not bring it down altogether.”