German Chancellor Angela Merkel was elected for a second term in a resounding victory in the 27 September elections that also saw her erstwhile coalition partner socialist Social Democratic Party (SDP) facing a serious defeat. The Christian Democratic Union (CDU) retained its position as Germany’s largest party with 33.5 percent and its right wing ally Free Democrats jumped to 15 percent. The result also dealt a big blow to Germany’s venerable Social Democratic Party (SDP) which could muster only 22.5 percent of the popular vote.

In the emerging dispensation, Merkel’s party will form a coalition with a more natural partner, the pro-business Free Democrats Party (FDP), which is expected to take a dominating position by handling key posts in the government including the Foreign Ministry.

The outcome has brought to nought predictions of a tight outcome by voters who seemed to have sided with Mrs Merkel for a stronger hand to deal with Germany’s long-term financial problems.

The electoral verdict reflected the desire of Germans to return to democratic normality and maintain a healthy struggle between coalition and opposition. And Merkel gave them what they asked for. For the first time since the defeat of her mentor Helmut Kohl in 1998, the black of the Christian Democrats and the gold of the Free Democrats will rule the Bundestag in Berlin.

Despite Merkel’s enormous personal popularity, support for her conservative bloc fell to a record low of 33.8 percent of the vote. The election also saw the lowest voter turnout (71.2 percent) in the country’s modern history and strengthening of small parties at the expense of the Volksparty (people’s party), a nickname for both the Christian Democrats and the Social Democrats, who appeal to a wider audience.

The new ally Free Democrats has bolstered its position to assert their agenda in the government. Traditionally junior partners in all German governments only had a marginal impact on policy making.

Stability

“We have achieved something great,” Mrs Merkel told her supporters after the results were announced. “We have managed to achieve our aim of a stable majority in Germany for a new government.” Together with the FDP, Mrs Merkel is expected to push for a new era of deeper economic reforms and tax cuts for Europe’s biggest economy. Mrs Merkel’s Christian Democratic Union (CDU) and the FDP mainly benefited from dissatisfaction over spiralling national debt and stagnant income levels.

Germany’s economy is coming out of the worst recession since the Second World War. Its unemployment rates are likely to soar later this year as the government is expected to withdraw some social sector SOPS on public sector employment. It is also facing problems in financing healthcare, education and a bloated social security system with national debt doubling to 85 percent, aggravated by £75 billion bailout of financial system.

Left Out

The drubbing of SDP is typical of the left throughout Europe, which is in the throes of a serious political crisis. It seems the public relies more on the ability of the conservative bloc to deal with the global economic crisis. So it was the German social-democrats who absorbed a stinging electoral blow, at a time when the public is actually quite tired of extreme capitalism seen in the banking crisis.

Foreign Policy

On the foreign policy front, the new coalition will have to renew a parliamentary mandate for German participation in the NATO-led mission in Afghanistan over the next few months.

NATO has demanded greater commitment from its allies in Afghanistan. The United States would naturally urge Merkel to clearly define Germany’s position within NATO. But FDP’s Guido Westerwelle has already declared Germany’s commitment to the continuation of its Afghanistan mission and it could mean an increase in the number of troops currently deployed in the country.

Germany’s increased engagement could signal a period of greater cooperation between Western powers and their stance toward the Middle East. Closer ties with Washington and the EU will mean a considerable re-evaluation of Germany’s role in the region, dramatically different from that of the previous government.

Germany’s interest in the Middle East region surpasses that of all other European powers. Germany is Iran’s biggest trading partner in the European Union. Renewed calls for stringent sanctions against Iran could force Germany to play a significant role in their implementation. Joining the United States and the European Union in their continued efforts to contain Iranian nuclear aspirations is likely to be the first move in a period of increased engagement by Germany.

Similarly, Germany’s close relationship with Israel can also come under the scanner. Its role in mediating prisoner exchanges between Israel and Hamas, and before that Hizbullah, may cease. Indeed, closer cooperation with Western powers in the Middle East might well mean an extension of Germany’s mediation efforts in the region.

Merkel’s administration had a good rapport with Israel. She made her third visit to Israel in two years in March 2008. In an interview with Haaretz in September 2005, the only interview she has given to Israeli media to date, Merkel promised “to fight anti-Semitism with all the means at our disposal – to energetically deepen our relations with Israel,” which she termed, “a precious treasure.”