More Uncertainty in the wake of Germany's Election

[HenryTo]

More uncertainty in the wake of Germany's election. One thing is for sure: The economy reforms that Angela Merkel has envisioned will definitely not come to pass.
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Polls: Merkel's Party Ahead in Germany

By DAVID RISING
Sunday, September 18, 2005 4:05 PM CDT

BERLIN - Exit polls showed conservative challenger Angela Merkel's party leading in German parliamentary elections Sunday but falling short of the majority she needed to form a center-right coalition as the nation's first female chancellor.

Gerhard Schroeder, written off as a lame duck a few weeks ago, finished stronger than expected and refused to concede defeat, saying he could still theoretically remain in power if talks with other parties were successful.

An exit poll by the Forsa agency showed Schroeder's party winning more seats in parliament even though Merkel's Christian Democrats received more votes overall.

"I feel myself confirmed in ensuring on behalf of our country that there is in the next four years a stable government under my leadership," he said to cheering supporters at his Social Democrat party headquarters while flashing the thumbs-up signal and holding his arms aloft in a gesture of triumph.

But Merkel claimed her party received a mandate from voters to form a new coalition government to carry out her plan to mend frayed ties with the United States.

"What is important now is to form a stable government for the people in Germany, and we ... quite clearly have the mandate to do that," she said.

Both Schroeder and Merkel said they would talk to all parties except the new Left Party, a combination of ex-communists and renegade Social Democrats.

Sunday's vote centered on different visions of Germany's role in the world and how to fix its sputtering economy. Schroeder touted the country's role as a European leader and counterbalance to America, while Merkel pledged to reform the economy and strengthen relations with Washington.

ZDF public television projections based on exit polls and early counting gave Merkel's Christian Democrats 35.2 percent and the Social Democrats 34.1 percent.

Merkel's preferred coalition partner _ the pro-business Free Democrats _ had 10.2 percent, while current Schroeder coalition partner Greens received 8.2 percent.

ARD public television showed near-identical results, with Merkel's party at 35.4 percent and the Social Democrats at 34.2 percent.

Forsa projected the Christian Democrats would win 34.8 percent of the vote and the Social Democrats 34.2 percent, but the Social Democrats would get more seats in parliament _ 223 to 220.

The Christian Democrats' projected totals were considerably worse than expected. Merkel's party consistently polled above 40 percent during the campaign, with surveys giving it a lead of 12 percentage points or more.

Schroeder claimed credit Sunday for trimming that lead, saying he accomplished "what many professional observers ... in this country believed was completely impossible weeks and even days ago."

"I do not understand how the (Christian Democratic) Union, which started off so confidently and arrogantly, takes a claim to political leadership from a disastrous election result," Schroeder said.

The results open a period of uncertainty as the parties negotiate to form a government. Voters were choosing lawmakers for the 598-seat lower house of parliament, which elects the chancellor to head the government.

Had Merkel reached a majority with the Free Democrats, they would have formed a center-right government to push through her proposals to get the economy going and cut unemployment by making it easier for small firms to fire people, cutting payroll taxes and giving companies more flexibility to opt out of one-size-fits-all regional wage agreements.

If she does become chancellor, she likely will have to water down her program as she partners with a party to her left in order to hold 50 percent of the seats in parliament. Merkel's party already controls the upper house of parliament.

The most likely combination, analysts have said, is a "grand coalition" between Merkel's party and Schroeder's party. Most predictions were that Schroeder would not participate in such a government, but his defiant statements Sunday cast doubt on that.

Free Democrats leader Guido Westerwelle said his party would not work with the current government pair, the Social Democrats and Greens.

If the new parliament cannot elect a chancellor in three tries, President Horst Koehler could appoint a minority government led by the candidate with a simple majority.

Merkel's plan to patch up relations with Washington, which frayed after Schroeder's refusal to back the U.S. invasion of Iraq in 2003, resonated with voters, as did her position that Turkey should not be allowed full membership in the 25-nation European Union.

"A country like Turkey just doesn't belong in the European community," said voter Torsten Quade, 41. "We're already going to let in countries like Romania and Bulgaria, and this is already too much because of how far behind they are."

But other voters said they supported Schroeder's party because he kept Germany out of the Iraq war and pushed for diplomacy to resolve concerns about Iran's nuclear program. Germany is one of three nations representing the EU in talks with Tehran.

"When you have a son coming of military age, this makes it even more important to vote for a government that isn't eager to go to war," said Stefan Deutscher, a 38-year-old business consultant voting in Berlin.

Schroeder called for the election a year ahead of time in frustration at resistance to his attempts to fix Europe's biggest economy, as unemployment hit record highs in his seven years in power and growth was sluggish. His limited measures cutting taxes and long-term jobless benefits have been slow to show convincing results.

A service of the Associated Press(AP)