Merkel gets her 'dream coalition' as Social Democrat vote collapses

Pro-business Free Democrats set to be junior party in Germany's federal coalition
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A triumphant Chancellor Angela Merkel swept to victory in yesterday's German general election and will form a new coalition government with the Free Democrats that is expected to cut taxes and put Europe's largest economy on a more pro-business course.

The result brings an end to Ms Merkel's unwieldy "grand coalition" with the Social Democrats and ushers in a new administration committed to economic reform and to axing plans to phase out nuclear power by 2021.

The outcome was a personal victory for the 55-year-old Chancellor but a major disappointment for her Christian Democrat party which won only 33.8 per cent of the vote – its second worst result in six decades.

By contrast Ms Merkel's favoured partners, the Free Democrats, who have pledged to cut the top income-tax rate by 10 per cent, achieved the best result in their history, with 14.6 per cent. Observers attributed the gains to the fact that many former conservative voters appeared to have been frustrated by the Merkel government's lack of commitment to economic reform and had switched support.

The Free Democrats' unexpectedly strong showing means Ms Merkel might have to allow them have a far greater say than she had bargained for. As a consequence, she is likely to face tough negotiating on policy, as well as hostility from within her own ranks, during her second term.

But she was all smiles last night. Dressed in a bright red jacket and grinning broadly, Ms Merkel was greeted with chants of "Angie, Angie" at Berlin's Christian Democrat headquarters. "We've done something great. We've achieved our goal, we've got a stable coalition and that's good for Germany," she told the crowd. "I want to be the Chancellor of all the Germans so that things can get better for all of us during these difficult times."

There was wild jubilation over at the Free Democrat headquarters, where the party was celebrating its best-ever general election result and a return of the party to government after an 11-year interlude. The party's leader, Guido Westerwelle, told cheering supporters: "We are proud to celebrate the best result since the founding of post-war Germany." Later, the man who could be in line to become Germany's next foreign minister, struck a more businesslike tone: "We're keeping our feet on the ground. Now we can really get down to working for Germany."

Yesterday's election was a disaster for the Social Democrats, who polled a mere 23.1 per cent of the vote, their worst general election performance since the founding of post-war West Germany. Die Linke ("The Left") – the successor organisation to the former East German Communist Party – mopped up a large chunk of those votes, taking a record 12.4 per cent.

Frank-Walter Steinmeier, the Social Democrat Chancellor candidate told supporters: "There is no way of talking round this one, it is a bitter defeat," he said. The resounding defeat was expected to result in major changes in the Social Democrat leadership and to a lengthy internal battle over the possibility of forming future coalitions with the controversial Linke party.

So far the Social Democrats have ruled out such coalitions at a national level, arguing that the Linke's policy on Europe and its demands to withdraw troops from Afghanistan are not compatible with national government.

Germany's Green Party followed the trend which saw all the smaller parties making significant gains. The party, led by former environment minister Jürgen Trittin, won 10 per cent of the vote and reached double figures for the first time nationally.

The turnout was estimated at 71.2 per cent, down more than six points compared with the 2005 German election – perhaps as a consequence of a lacklustre campaign, with Ms Merkel and her rivals accused of duetting not duelling. The conservatives were criticised for failing to spell out policy and relying on the Chancellor's personal popularity to see them through.

Economic experts said that Germany's incoming administration faced a series of difficult challenges because of the massive debts it had incurred to stave off the worst effects of the financial crisis. Several doubted whether the new government would be able to live up to its pledge to cut taxes.

Election diary

The Bild-Zeitung – Germany's equivalent of The Sun – did its bit to get out the vote by printing vouchers in its Saturday and Sunday edition that could be redeemed against breakfast at McDonald's. A little message on the voucher encouraged people to vote. There was no instruction how to vote, of course, but Bild wears its conservative sympathies on its sleeve.

*And another piece of dubious ingenuity from Bild. On the eve of the poll, it devoted pages two and three to 100 members of the paper's staff, complete with mugshots, who each said how they would vote, and why. I rather think that any media, or any other, organisation - that tried the same thing with their staff in Britain might confront non- cooperation and appeals to privacy on the grand scale.

*The German election campaign itself might have lacked excitement , the nation's usually stolid advertising industry did its best to compensate. One beer company had a big poster with a picture of one of its bottles in the middle, and the legend: "This is one poster that actually has some content."