Contemporary coalition formation in Germany is characterized by two competing blocs, a centre-left and a centre-right camp. The centre-left consists of Social Democrats and Greens, whereas the centre-right bloc includes Christian Democrats and Liberals. These blocs are largely in line with the positioning of the parties in the German policy space. The most important elements that define this space are a socioeconomic dimension that covers the employer/worker cleavage, while a sociocultural dimension mirrors the religious/secular cleavage, with a greater distinction in recent years between actors with materialist and post-materialist values. During the past decade and a half, however, both competing blocs have regularly failed to win majorities. As a consequence, the larger parties have had to form camp-crossing “grand coalitions.” This discrepancy between party competition and government formation is problematic and is likely unsustainable in the long run. Alternative party constellations can be found in the German states, which can be seen as possible models for the federal level.