Voters ditch old coalition in move right

Europe's biggest economy could be poised for a return to the old left-right political divide after the conservative win in Germany.

Chancellor Angela Merkel can luxuriate in a personal victory and the chance of returning to office at the helm of a new pro-business, tax-cutting coalition. But her triumph has been marred by the slump of her Christian Union conservatives which, like the Social Democratic Party, garnered their lowest share of the national vote in Germany's postwar history.

The two big parties paid the price for their "grand coalition", an experiment that has lurched along for the past four years. Voters migrated towards a business-friendly liberal group, the Free Democrats, to the Greens and the radical Left (Linke) party.

Merkel can ditch the SPD and return to power with the Free Democrats, by far her favoured partner for a coalition.

"We have attained our goal of forging a stable majority for a new Government," Merkel announced at party headquarters in Berlin. "I want to be the Chancellor of all Germans, so that things improve for our country."

Merkel's group gained 33.8 per cent of the vote and the SPD, her junior partner in government, 23 per cent. The Free Democrats notched up 14.6 per cent, placing them in a position to return to government for the first time since 1998. The centre-right parties received a working majority of 42 seats.

Farther to the left, the Greens, pitching to undecided young voters, were credited with 10.7 per cent, their best federal score ever. The left, wooing the jobless and alienated supporters of the SPD, did even better with 11.9 per cent. To enter the Bundestag, the Lower House of Parliament, a party needs at least 5 per cent of the ballot.

The outcome spoke amply of the popularity of Merkel. But it also illustrated the unpopularity of the "grand coalition" itself and the allure of radical and single-issue campaigning at a time of disillusionment with capitalism and fears about climate change.

The Free Democrats have leverage beyond their percentage. They have featured in coalitions that have governed Germany for 28 out of the last 60 years. Their leader, Guido Westerwelle, is on course to become Germany's first openly gay vice-chancellor and foreign minister. The party can expect at least two other ministries, with the rest allotted to Merkel's Christian Democrats and their Bavarian ally, the Christian Social Union (CSU).

Under a centre-right coalition, policymaking in Germany would be sure to shift rightward. The two parties are in favour of simplifying and cutting income taxes, extending the lifespan of some nuclear plants threatened with closure, reducing state influence over business and selling stakes in state companies.

But their room for manoeuvre will be cramped by Germany's big budget deficit, high unemployment and the lack of a majority in the Bundesrat Upper House.

The Lower House may be polarised by the gains of the Left and the Greens. Together with the SPD, they will have the potential - if not the unity - to keep the Government under intense pressure.