Hope and fear in EU as hardliner tipped to be German finance minister

Prospect of the FDP's Christian Lindner taking charge has half of Europe quaking in its boots'

Germany's biggest neighbours are watching the formation of the country's new government with a mixture of hope and fear, amid concerns that a fiscal hardliner hotly tipped to become the next finance minister could drag the continent back to the frosty standoffs of the eurozone crisis.

The Social Democratic party (SPD), the German Greens and the Free Democratic party (FDP) are expected to inch further towards a traffic light" power-sharing deal on Friday, with formal coalition talks likely to start next week.