Germany in political limbo after Social Democrats' narrow win

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Germany is headed for weeks, if not months, of protracted coalition haggling as Chancellor Angela Merkel's conservatives insisted Monday on trying to form a government even after losing to the Social Democrats in a tight race.

Finance Minister Olaf Scholz, who led the Social Democrats' (SPD) campaign, said Europe's biggest power would not be thrown off by the power struggle, stressing that Germany would remain "stable" even as parties scramble for coalition partners.

But the country pivotal in shaping Europe's responses on issues from the coronavirus pandemic to relations with Russia and China, risks being put out of play on the international scene for some time, just as the upcoming COP26 climate summit will be demanding action from the world's biggest powers.

Europe's largest economy will also hold the presidency of the G7 club of rich nations next year, and will need a government capable of setting the international agenda.

Washington said Monday it hoped to maintain strong relations with Berlin while parties battle to build a new government.

The United States will "await the outcome of negotiations to form the next German government. We also look forward to continuing our strong partnership with Germany on many key issues of mutual concern," said State Department deputy spokeswoman Jalina Porter.

Joe Biden's administration has developed close relations Merkel, who who suffered open friction with former president Donald Trump

Preliminary official results showed the centre-left Social Democrats -- junior partners in Merkel's coalition -- narrowly won the vote at 25.7 percent, while her centre-right CDU-CSU bloc sunk to a historic low of 24.1 percent.

The Green party placed third at 14.8 percent, its best result yet but still short of expectations.

Laschet, 60, took responsibility for his side's poor showing and vowed "renewal in all areas".

But he insisted that "no party" -- not even the SPD -- could claim a mandate to govern from Sunday's outcome, as said he was ready to head a coalition.

Scholz, 63, rejected Laschet's bid, saying voters had made it clear that the conservatives "should go into the opposition".

The finance minister also sought to play down the impact of drawn-out negotiations for a governing majority. "You should know that Germany always has coalitions, and it was always stable," he said.

From Paris, French minister for European affairs Clement Beaune stressed that France "has an interest to have a strong German government in place".

The Kremlin said it hoped for "continuity" in Moscow's ties with Berlin.

- 'Fresh start' -

While Germany will keep plodding along with a caretaker government still led by Merkel, analysts warned of a paralysed Berlin on the global stage.

"Although it keeps managing all dossiers, it loses the legitimacy to shape international initiatives or domestic legal acts," said Christian Moelling of the German Council on Foreign Relations.

"Until political leadership again becomes available, bureaucracy will get relatively stronger as it aims to conserve the status quo. Given the fragility of the international environment, this is not good news."

In the fractured political landscape of the post-Merkel era, the most likely outcome will be a three-way alliance -- ending the post-war tradition of two-party coalition governments.

Both Scholz and Laschet are wooing the Greens and the liberal, pro-business FDP party (11.5 percent) to cobble together a parliamentary majority.

The two kingmakers however are not natural bedfellows, diverging on issues like tax hikes and public investment in climate protection.

Green chancellor candidate Annalena Baerbock -- whose party hoped to do better with the climate crisis a top voter concern this year -- stayed vague about her preferred tie-up, but said it was time for "a fresh start" in the country of 83 million.

FDP leader Christian Lindner has signalled a preference for a coalition with the CDU-CSU and the Greens, dubbed "Jamaica" in a nod to the colours of each party's logo -- black, green and gold -- which are the same as the Jamaican flag.

But Laschet, already unpopular with his party, has been further weakened by the poor showing.

"How sustainable his office as CDU chief is, will be seen in the next days," said Der Spiegel weekly, calling Laschet's coalition effort a sign of an "acute loss of reality".

- Legacy -

Ironically, the outgoing right-left coalition would have enough support to form Germany's next government, this time under the leadership of the SPD.

However, the Social Democrats have gone into the race with the clear aim of avoiding a repeat of the partnership with Merkel's conservatives.

No party will team up with the far-right Alternative for Germany (AfD), whose score fell to 10.3 percent from nearly 13 percent at the last election in 2017.

Should the complex coalition talks last beyond December 17, Merkel would overtake Helmut Kohl as Germany's longest-serving chancellor since World War II.

If Scholz succeeds in forming a governing majority, he will be Germany's first SPD chancellor since Gerhard Schroeder, who lost to Merkel by a whisker in 2005.

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