Chastened Merkel searches for coalition partners after election slide

Chastened Merkel searches for coalition partners after election slide

Germany's Angela Merkel has begun the tough task of trying to build a coalition Government after securing a fourth term as chancellor in an election which saw her support slide and the far right make significant gains.

Key points:

  • Many Germans see the rise of the far-right as similar to Brexit and Trump before it
  • Ms Merkel says she has "no illusions" her fourth term would be difficult
  • Former coalition partners go into opposition forcing Ms Merkel to form a new bloc

Damaged by her decision two years ago to allow one million asylum seekers into Germany, Ms Merkel's conservative bloc secured 33 per cent of the vote on Sunday, losing 8.5 points — its lowest level since 1949. Her coalition partners, the centre-left Social Democrats (SPD), also slumped and said they would go into opposition.

Voters flocked to the anti-immigration Alternative for Germany (AfD), the first far-right party to enter the German Parliament in more than half a century. But the AfD hardly had time to savour its third-place showing before it fell into internal bickering.

Many Germans see the rise of the AfD as a similar rejection of the status quo as votes for Brexit and Donald Trump last year.

But Germany's political centre held up better than in Britain and the United States as more voters have benefited from globalisation and most shun the country's extremist past.

On Monday, Ms Merkel made clear she intended to serve a full four years as chancellor, despite the losses to the far right.

"My decision [to stand for a full term] last year did not depend on what percentage I scored," she said, adding she went into the election campaign with "no illusions" that her fourth term could be difficult.

Ms Merkel said she believed that voters had given their verdict now and that the parties should accept the election outcome by trying to form a government and avoiding new elections.

Ms Merkel's party remained the biggest parliamentary bloc and Europe's most powerful leader said her conservatives would set about building the next Government — she said she was sure a coalition would be agreed by Christmas.

Could Merkel become a lame duck?

Martin Schulz, leader of the Social Democrats that have governed with Ms Merkel since 2013, said his party had no choice but to go into opposition after dropping to a post-war low of 20.5 per cent.

"We have understood our task — to be a strong opposition in this country and to defend democracy against those who question it and attack it," Mr Schulz told party members to applause.

Investors were unsettled by the prospect of a weaker Ms Merkel at the head of a potentially unstable coalition with the pro-business Free Democrats (FDP) and Greens, dubbed "Jamaica" as the parties' black, yellow and green colours mirror its flag.

They are also worried that months of coalition talks could distract from negotiations with Britain over its divorce from the European Union and efforts to push further integration.

"The weak result could make Angela Merkel a lame duck much faster than international observers and financial markets think," ING economist Carsten Brzeski said.

Klaus Wohlrabe, economist at the Munich-based Ifo economic institute, said new elections could not be excluded and the result could stoke uncertainty as German business confidence deteriorated unexpectedly in the weeks before the election.

Many Germans were alarmed by the rise of a party likened by the foreign minister to Nazis. Protesters threw stones and bottles at police outside the AfD's campaign party in Berlin on Sunday evening.