Merkel wins, Germans opt for center-right coalitionBy Noah Barkin and Madeline ChambersBERLIN (Reuters) - German voters gave Chancellor Angela Merkel a second term in an election on Sunday and a mandate to form a new government with the business-friendly Free Democrats (FDP) that is expected to cut taxes to boost growth.
The conservative Merkel has ruled for the past four years in an awkward "grand coalition" with her main rivals, the center-left Social Democrats (SPD).
The election result frees her from the shackles of that partnership and allows her to form the center-right coalition she has argued is best placed to nurture Europe's largest economy back to health following its worst post-war recession.
The next government faces major economic challenges. It will have to get a surging budget deficit under control, cope with rising unemployment and ward off a credit crunch as fragile banks rein in lending.
Together with the FDP, Merkel is expected to pare back the role of the state in the economy and extend the lifespan of German nuclear plants that are scheduled to be phased out over the next decade.
The parties, which last ruled Germany between 1982 and 1998 when Helmut Kohl was chancellor, will have to overcome differences on the size and timing of tax cuts in coalition talks over the coming weeks. Some analysts say, given budget constraints, such cuts will likely have to wait at least a year.
"We can really celebrate tonight, but afterwards we have a hard job ahead of us," Merkel, wearing a bright red suit, told cheering supporters.
Projections from ARD and ZDF public television showed Merkel's conservative bloc -- the Christian Democratic Union (CDU) and the Bavarian Christian Social Union (CSU) -- on 33.6 percent, down from their score of 35.2 percent in 2005, and their second-worst result in the post-war era.
But the FDP, a party which saw its support rise in the wake of the financial crisis, compensated for those losses, surging to a record high of 14.6 percent and putting the center-right over the top.(More)
The conservative Merkel has ruled for the past four years in an awkward "grand coalition" with her main rivals, the center-left Social Democrats (SPD).
The election result frees her from the shackles of that partnership and allows her to form the center-right coalition she has argued is best placed to nurture Europe's largest economy back to health following its worst post-war recession.
The next government faces major economic challenges. It will have to get a surging budget deficit under control, cope with rising unemployment and ward off a credit crunch as fragile banks rein in lending.
Together with the FDP, Merkel is expected to pare back the role of the state in the economy and extend the lifespan of German nuclear plants that are scheduled to be phased out over the next decade.
The parties, which last ruled Germany between 1982 and 1998 when Helmut Kohl was chancellor, will have to overcome differences on the size and timing of tax cuts in coalition talks over the coming weeks. Some analysts say, given budget constraints, such cuts will likely have to wait at least a year.
"We can really celebrate tonight, but afterwards we have a hard job ahead of us," Merkel, wearing a bright red suit, told cheering supporters.
Projections from ARD and ZDF public television showed Merkel's conservative bloc -- the Christian Democratic Union (CDU) and the Bavarian Christian Social Union (CSU) -- on 33.6 percent, down from their score of 35.2 percent in 2005, and their second-worst result in the post-war era.
But the FDP, a party which saw its support rise in the wake of the financial crisis, compensated for those losses, surging to a record high of 14.6 percent and putting the center-right over the top.(More)
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