Merkel hails victory in Germany vote

German Chancellor Angela Merkel's dull but durable strategy of "no-surprises, no-conflicts" earned her party the best possible outcome in German elections tonight – with voters enabling her to form a politically comfortable "center-right" coalition with the pro-business, tax-cutting Free Democratic Party (FDP), from which she can govern from a position of relative strength, despite evident polarization between right and left in Germany.

"We accomplished something amazing ... a sustainable majority ... for a new coalition ..., " said Merkel, adding: "I want to be the chancellor for all Germans ... at a moment of crisis."

The outcome marks the end of the "grand-coalition" between Merkel's conservative Christian Democratic Party and the left-leaning Social Democratic Party (SPD), which will leave the government of Europe's largest economy after 11 years.

Indeed, the SPD showing of 23 percent was a sharp blow to the proud, 160-year-old party, its lowest score since World War II – and a continuation of a season of setbacks for the left around Europe. "These are catastrophic numbers for the SPD," notes Jan Techau of the German Council on Foreign Relations in Berlin.

'Black-gold' coalition

For Merkel, a "center-right" CDU-FDP government, called a "black-gold" coalition in the German political lexicon, is likely to help her shape a liberal free-market economic policy more to her liking. Only days ago, pundits anticipated that Merkel would be forced back into a revamped grand coalition with the SPD. Yet that coalition would have been on shakier ground – with the SPD expected to quickly push hard on leftist policies on minimum wage and foreign policy in a prelude to busting up the coalition and bringing a new and perhaps ruling alignment among left-leaning parties. Berlin CDU parliamentarian Karl Georg Wellmann argues that hot fights within the SPD would begin "within a year" to break up a new grand coalition: "Big parts, 50 percent of the SPD, are strong on the left side, and this wing of the party is committed to merge with the other left parties.... The coalition with the FDP is safer for Merkel."

SPD lost votes on the left

The SPD was unable to define its identity clearly to voters on the left, say analysts.

As a result, it leaked votes to the Green Party (which earned slightly more than 10 percent), but even more to the hard-left former East German Communist Party, Die Linke, which jumped into German federal politics and made waves with a vote of more than 12 percent, higher than the 10 percent it sought. Many young voters, often a traditional SPD-left cohort, veered to the Pirate Party – devoted to internet freedom and security – in a surprising outcome of 2 percent, double Pirate's anticipated total.

A new partner for Merkel

Merkel's new partner, the FDP, led by Guido Westerwelle, is socially liberal but free-market, desirous of less state intervention, and more "tax cut" oriented even than Merkel herself. But with Germany facing serious budget deficits and an economic crisis, Merkel and some FDP politicians have said in recent weeks the tax cuts may be delayed. Mr. Westerwelle would be Germany's first openly gay foreign minister, in a CDU-FDP coalition.

The election may represent the end of the political road for current SPD leader and German Foreign Minister Frank-Walter Steinmeier, analysts say – though there is no obvious SPD leader waiting in the wings. The SPD is expected to enter a period of severe soul-searching over its identity and future as it becomes an opposition party. The SPD has not worked at the federal level with Die Linke for many reasons, ideological and historical, though it now may need to explore this option.

Steinmeier admitted defeat in Berlin minutes after the polls closed, saying: "We will be an opposition party that will examine in detail how the new government works – and I doubt that they can do a good job."