Angela Merkel starts process of coalition building

The morning after: a Merkel election poster is taken down in the northern town of Itzehoe; below the final state of the parties. Picture: Getty

Even the chancellor’s political foes acknowledged she was the big winner of the first German vote since the start of the euro crisis in 2010 thrust her into the role of Europe’s dominant leader.

But despite leading her party to their best result since 1990, with 41.5 per cent of votes putting them five seats short of the first absolute majority in parliament in over half a century, the 59-year-old Mrs Merkel had little time to celebrate.

“We are, of course, open for talks and I have already had initial contact with the SPD (Social Democratic Party) chairman, who said the SPD must first hold a meeting of its leaders on Friday,” Mrs Merkel told a news conference, adding that she did not rule out talks with other potential coalition partners.

Analysts say coalition building could take as long as two months given signs Mrs Merkel’s SPD arch-rivals would play hardball over repeating the “grand coalition” she led from 2005-2009.

That coalition worked well for Mrs Merkel in her first term but cost the SPD millions of leftist votes.

“It will be an extremely long road,” said Ralf Stegner, head of the left wing of the SPD which has major reservations about becoming junior partners again.

The 150-year-old SPD may have finished a poor second with their second-worst post-war result, but they know Mrs Merkel has to come knocking after her current centre-right coalition partners, the Free Democrats (FDP), failed to get back into parliament.

One SPD leader half-joked that it would have been better if Mr Merkel had got her own slim majority: “That would have been the worst punishment for her – to bear responsibility for everything on her own.”

But in German politics, where only one post-war chancellor has won an absolute majority – conservative patriarch Konrad Adenauer, in 1957 – complex coalition-building is par for the course and few politicians build consensus better than MrsMerkel. Her calm leadership through the euro crisis has reinforced her status as “Mutti” (mother) of the nation, but she counted on the SPD and Greens’ support on all the eurozone bailout votes.

Polls show a majority of German voters would like another “grand coalition”, as do many of Germany’s partners in the euro currency area, who expect the SPD to soften Mrs Merkel’s austerity-focused approach to struggling states such as Greece.

German government bond futures rose but the euro came under pressure on worries about how long it will take Mrs Merkel to form a coalition. Continuity may come at a high price for Merkel, in terms of cabinet posts and policy concessions for the SPD.

“You should ask the CDU first if they are willing to pay a price,” said SPD chairman Sigmar Gabriel, after being asked by reporters what his demands might be.

The SPD might insist on its campaign demands for a legal minimum wage and higher taxes on the rich. It could demand the finance ministry, pushing out respected 71-year-old Wolfgang Schaeuble, or other posts like the foreign or labour ministries.

“There will be no quick formation of a government,” said an SPD insider. “The party will try to drive up the price.”

After an election that gave a slim numerical majority to the leftist opposition, the SPD and Greens may even feel pressure to review a historical taboo against allying with the Left Party, heirs to the communists who built the Berlin Wall and still inspire distrust beyond their steady 8.5 per cent of votes. If Mrs Merkel and Mr Gabriel do not agree she could switch her focus to the Greens.

Many progressive CDU supporters favour this option and think Katrin Goering-Eckardt, a 47-year-old Greens leader from east Germany who is close to the Lutheran church, is a snug fit.

But the CDU’s conservative wing, embodied by tough-talking parliamentary leader Volker Kauder, dislike the pacifist and ecologist party.