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Germany facing political limbo

Major parties fail to gain clear mandate

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BERLIN, Germany (CNN) -- Germany's leading conservative party has fallen short of the majority of parliamentary seats needed to form a new government to replace Chancellor Gerhard Schroeder following elections Sunday.

The results left neither Angela Merkel's Christian Democrats nor Schroeder's Social Democrats in a good position to assemble a ruling coalition.

If the new parliament cannot elect a chancellor in three attempts, President Horst Koehler could appoint a minority government led by the candidate with a simple majority, AP said.

Schroeder argued Sunday that voters refused to grant Merkel a mandate to lead the country.

"Of course we hoped for a better result," Merkel said, but she stressed that "we're the strongest political power in the country."

"The campaign is over," she said. "And now, it's time to create a stable government for the people in Germany."

Merkel's coalition of the Christian Democrats and Christian Social Union was expected to garner 40 percent of the vote.

Instead, according to preliminary results from 298 of 299 districts, it won 35.2 percent. That gives it 225 seats in the 598-seat Bundestag, Germany's parliament -- a lower-than-expected number that makes it difficult to form a center-right coalition with the pro-business Free Democrats, who won 9.8 percent of the vote.

Schroeder's Social Democrats won 222 seats with 34.3 percent of the popular vote. The Free Democrats claimed 61 seats; Schroeder's current coalition partners, the Greens, won 8.1 percent of the vote and 51 seats; the upstart Left party won 8.7 percent, which worked out to 54 seats.

Voting in the final district, in the eastern city of Dresden, has been delayed until October 2.

If Merkel can assemble a coalition, she would be the first woman to lead Germany.

But to do so, she might have to share power with the Social Democrats in a "grand coalition" -- a move that would likely torpedo her plans to push through the aggressive labor and tax reforms she says are needed to cut unemployment, which hit post-war highs over 11 percent this year.

Both the Social Democrats and the Christian Democrats have ruled out an alliance with the Left Party, led by former Communists and disaffected members of Schroeder's party.

Social Democrat leaders have suggested adding the Free Democrats to their coalition with the environmentalist Greens in order to keep Schroeder in office, but Free Democrat leader Guido Westerwelle rejected that idea Sunday night.

"We, the Free Democrat Party, want a true change of government," Westerwelle said.

Schroeder and his allies assailed Merkel's reform plans throughout the campaign, warning they would undermine Germany's extensive and popular welfare state. He argued he could revamp the country's social programs without hurting ordinary Germans.

The chancellor called the results "disastrous" for Merkel.

"Based on this disaster of election results, that they can claim a political mandate for Germany is something that I cannot understand -- and something that will not happen, ladies and gentlemen," he said.

But Merkel said her party "does have a clear mandate to govern this country."

"Germany needs to go down the path of reforms, even though many people are a little anxious, a little worried about this," she said.

Schroeder called elections a year early after the western state of North Rhine Westphalia, one of his party's strongholds, fell to the conservatives in May. He trailed far behind Merkel in early polls, but Merkel's support faded as election day neared.

Merkel, the daughter of a pastor from the once-communist East Germany, attacked Schroeder for failing to cut unemployment and criticized his support for Turkey's acceptance into the European Union.

And Schroeder, the son of a cleaning woman widowed by World War II, reminded voters of the issue that observers credited with his 2002 win -- his opposition to the U.S.-led war in Iraq..

CNN Berlin Correspondent Chris Burns contributed to this report

Copyright 2005 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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