BERLIN - German Chancellor Angela Merkel won a fourth term in office on Sunday but Europe's most powerful leader will have to govern with a far less stable coalition in a fractured parliament after her conservatives hemorrhaged support to a surging far right.
Two years after Merkel left German borders open to more than 1 million migrants, the anti-immigration Alternative for Germany (AfD) stunned the establishment by becoming the first far-right party to enter parliament in more than half a century.
The AfD won 13.0 percent of the vote - more than expected and one of many shocks on a night of drama that saw Merkel's conservatives get their worst result since 1949, and her main Social Democrat (SPD) rivals their worst since 1933.
Describing the far right's success as a test for Germans, Merkel insisted she had a mandate to govern - a formidable challenge as she has little choice but to cobble together a three-way coalition with a pro-business group and the Greens.
"Of course we had hoped for a slightly better result," a humbled Merkel said after her conservative bloc slumped to 32.9 percent of the vote - down from 41.5 percent at the last election in 2013.
But she added: "We are the strongest party, we have the mandate to build the next government - and there cannot be a coalition government built against us."
The euro slipped around 0.4 percent in early Asian trading as it became clear the results would make forming a coalition tricky for Merkel.
Coalition building could take months as Merkel's only straightforward path to a majority in parliament would be a three-way tie-up with the liberal Free Democrats (FDP) and the Greens - an arrangement untested at national level.
The Social Democrats, who have served with Merkel's conservatives as junior partners in a "grand coalition" for the past four years, won just 20.6 percent of the vote, as nearly half of voters repudiated the two parties that have dominated Germany since World War Two.
SPD leader Martin Schulz said the party would refuse to rejoin a coalition and instead take up its position as the main opposition. The Social Democrats appear to have been hurt badly by being in government, making it difficult to distinguish themselves from Merkel's conservatives.
After shock election results last year, from Britain's vote to leave the EU to the election of U.S. President Donald Trump, leaders of Europe's establishment have looked to Merkel to rally the liberal Western order.
A pastor's daughter who grew up in Communist East Germany, she has acted as an anchor of stability in Europe and beyond. Now, she faces an unstable situation at home as she must form a coalition, an arduous process that could take months.
"TECTONIC SHIFT"
Sunday's election, fought against the tense backdrop of surging support for far left and far right parties across Europe, delivered a fractured German parliament with six party groups, up from four previously.
Josef Joffe, publisher-editor of Germany weekly Die Zeit, said the vote marked a "tectonic shift in German politics" and that the three-way coalition Merkel looks likely to try to forge will be "highly unstable".
Leading AfD candidate Alexander Gauland vowed his party would "hunt" the new government, whatever its make-up, adding: "We'll get our country and our people back."
In France, far-right leader Marine Le Pen congratulated the AfD, tweeting: "Bravo to our AfD allies for this historic showing!"
A large group of protesters gathered outside the AfD's post-election party and police said they made several arrests.
The European Jewish Congress expressed alarm at the AfD's success, adding: "We trust that centrist parties in the Bundestag will ensure that the AfD has no representation in the coming governing coalition."
The AfD says immigration threatens German culture, but denies that it is racist: "We will neither tolerate xenophobia nor racist positions. But we simply don't have them either," AfD co-leader Joerg Meuthen said.
The result makes kingmakers of both the FDP and the Greens, both of which have played the role in the recent past but neither of which now has enough support on its own to give Merkel a majority.
FDP leader Christian Lindner, an ambitious 38-year-old who preaches an ultra-hard line on Europe and has unsettled the German political establishment, said he was open to coalition talks with Merkel but that Germany needed a change of course.
The Greens' Katrin Goering-Eckardt said: "We will see if there can be cooperation."
A three-way tie-up of Merkel's conservatives, the FDP and the Greens - known as a "Jamaica" coalition because the black, yellow and green colours of the three parties match the Jamaican flag - is widely seen as inherently unstable.
The Greens - keen on regulation - and the business-friendly FDP are at opposite ends of the political spectrum and a clash of policy visions would be likely on tax, energy, the European Union and migrants.
Despite losing support, Merkel, Europe's longest serving leader, will join the late Helmut Kohl, her mentor who reunified Germany, and Konrad Adenauer, who led Germany's rebirth after World War Two, as the only post-war chancellors to win four national elections.
(Additional reporting by Caroline Copley, Michael Nienaber and Thomas Escritt; Editing by Kevin Liffey, Keith Weir and Peter Graff)
source: news.abs-cbn.com
Polls show Merkel heading for historic fourth term
BERLIN - Germans vote in a national election on Sunday that is likely to see Chancellor Angela Merkel win a historic fourth term and a far-right party enter parliament for the first time in more than half a century.
Merkel's conservative bloc is on track to remain the largest group in parliament, opinion polls showed before the vote, but a fracturing of the political landscape may well make it harder for her to form a ruling coalition than previously.
With as many as a third of Germans undecided in the run-up to the election, Merkel and her main rival, centre-left challenger Martin Schulz of the Social Democrats (SPD), urged them on Saturday to get out and vote.
"We want to boost your motivation so that we can still reach many, many people," the chancellor, 63, said in Berlin before heading north to her constituency for a final round of campaigning.
In regional votes last year, Merkel's conservatives suffered setbacks to the hard-right Alternative for Germany (AfD), which profited from resentment at her 2015 decision to leave German borders open to over one million migrants.
Those setbacks made Merkel, a pastor's daughter who grew up in Communist East Germany, wonder if she should even run for re-election.
But with the migrant issue under control this year, she has bounced back and thrown herself into a punishing campaign schedule, presenting herself as an anchor of stability in an uncertain world.
Visibly happier, Merkel campaigned with renewed conviction: a resolve to re-tool the economy for the digital age, to head off future migrant crises, and to defend a Western order shaken by Donald Trump's U.S. election victory last November.
"GRAVEDIGGERS OF DEMOCRACY"
Both Merkel and Schulz worry that a low turnout could work in favour of smaller parties, especially the AfD, which is expected to enter the national parliament for the first time. On Friday, Schulz described the AfD as "gravediggers of democracy."
An INSA poll published by Bild newspaper on Saturday showed sliding support for Merkel's conservatives, who dropped two percentage points to 34 percent, and the SPD, down one point to 21 percent - both now joined in an unwieldy "grand coalition".
The anti-immigrant AfD, rose two points to 13 percent - a result the poll showed would make it the third largest party.
Should she win a fourth term, Merkel will join the late Helmut Kohl, her mentor who reunified Germany, and Konrad Adenauer, who led Germany's rebirth after World War Two, as the only post-war chancellors to win four national elections.
The AfD's expected entry into the national parliament will herald the beginning of a new era in German politics that will see more robust debate and a departure from the steady, consensus-based approach that has marked the post-war period.
Coalition building after the election will be an arduous process that could take months as all potential partners are unsure whether they really want to share power with Merkel. All major parties refuse to work with the AfD.
Electoral arithmetic might push Merkel to renew her grand coalition with the SPD, or she might opt for a three-way alliance with the pro-business Free Democrats (FDP) and environmentalist Greens.
(Editing by Stephen Powell)
source: news.abs-cbn.com
BERLIN - At first glance, Germany's federal election looks like a done deal -- all major polls predict Chancellor Angela Merkel's conservatives to come in first, a result that should mean no political upheaval in Europe's biggest economy.
But that's the first glance. The devil will be in the detail of what coalition is likely to come after Sunday's vote, and with it whether Merkel's economic policies can remain in position.
Those policies have reigned over booming growth and rising consumer confidence.
The status quo, though, will depend to a certain extent on how Merkel's centre-right CDU/CSU bloc fares compared with her incumbent junior coalition partner, the Social Democrats (SPD).
The far-right Alternative for Germany (AfD) party, the pro-business Free Democrats (FDP) and others could potentially hold the balance.
So a few percentage points will decide Merkel's coalition options and her policy agenda for the next 4 years -- with consequences for Berlin's stance on euro zone integration, tax cuts, state spending and the privatization of state assets.
"It's all about politics next week -- and that means German politics," said Andrew Bosomworth, a senior portfolio manager at Pimco, one of the world's largest bond funds.
The base scenario is that Merkel will win the election and remain chancellor for a fourth term. "The big question is with which of the other parties she will team up," Bosomworth said.
Coalition building will be complicated by the fact that the anti-immigration AfD and the socially liberal FDP are forecast this year to easily pass the 5 percent threshold to enter the Bundestag lower house of parliament after failing in 2013.
This means that traditional 2-party alliances -- such as a "black-yellow" coalition between Merkel's conservatives and the FDP or a "red-green" coalition between the center-left SPD and the Greens -- are likely to fall short of a stable majority.
The most likely scenarios are therefore another "grand coalition" between Merkel's bloc and the SPD -- usually a last resort combination -- or a 3-way alliance untested at national level between the conservatives, the FDP and the Greens -- dubbed the "Jamaica coalition" due to the parties' colors.
Both options would broadly mean a continuation of CDU/CSU's economic policies, including closer cooperation within the euro zone, sealing more free trade deals and granting minor tax cuts.
"If Merkel's conservatives win as expected, the market reaction is likely to be calm. A Merkel victory is basically priced in," Bosomworth said.
BLACK-YELLOW
However, last year's elections in the United States and Britain showed that pollsters can get it badly wrong. There is also a chance that the conservatives and the FDP could get just enough votes to form a black-yellow coalition.
Such a scenario could bring some market volatility since the FDP is less open to helping other euro zone countries and its leader has criticized French President Emmanuel Macron's plan to create a joint budget for the single currency bloc.
Some investors have even warned that a black-yellow coalition could lead to a renewal of the euro zone debt crisis.
Such fears are based on the idea investors could shift their money out of government bonds from southern European countries.
Berenberg economist Holger Schmieding, however, reckons this is all exaggerated. "An FDP presence in government would not jeopardise European reforms," he said.
With the FDP calling for privatization of state assets such as the government's stakes in Commerzbank, Deutsche Telekom or Deutsche Post, a black-yellow coalition scenario is likely to push up some stocks.
"The DAX could make a small jump if there should be a majority for black-yellow," said Joerdis Hengelbrock, portfolio manager at Sal. Oppenheim.
Regardless of the uncertainty surrounding Merkel's future coalition partner or partners, investors such as Berkshire Hathaway's Warren Buffett are banking on the pastor's daughter to remain at the helm of Europe's biggest economy.
"Merkel is an extraordinary personality," Buffett told business daily Handelsblatt. "Germany and the world, from my point of view, need a leadership personality like Angela."
source: news.abs-cbn.com
