Merkel gets ready for tough horse-trading

Chancellor Angela Merkel is strongly favoured to win a third term at the helm of Europe's biggest economy as Germans voted in a national election yesterday, but the popular conservative's hopes of governing with centre-right allies for another four years were in the balance.

About 62million people were eligible to elect members of the lower house of parliament, which chooses the chancellor.

Merkel's Christian Democratic Union and its Bavaria-only sister, the Christian Social Union, appeared likely to emerge as the strongest force and fend off a challenge from centre-left rival Peer Steinbrueck.

But beyond that things get more complicated.

No single party has won a majority in Germany in more than 50 years. Merkel would like to continue governing with her partner of choice, the pro-business Free Democratic Party - but polls have shown support for the smaller party fading from nearly 15% in the 2009 election to about the 5% needed to have any seats in parliament.

Merkel pleaded on Saturday for "a strong mandate so that I can serve Germany for another four years, make policies for ... a strong Germany, for a country that is respected in Europe, that works for Europe; a country that stands up for its interests in the world but is a friend of many nations".

Her party has rebuffed calls from leading Free Democrats for Merkel supporters to back them, saying it has no votes to spare.

Polls show that the coalition is in a dead heat with a combination of Steinbrueck's Social Democrats, their Green allies and the hard-line Left Party - but the two centre-left parties have ruled out an alliance with the last.

If her current coalition falls short of a parliamentary majority, the likeliest outcome is a switch to a Merkel-led "grand coalition" of her conservatives with the Social Democrats, the same combination of traditional rivals that ran Germany from 2005-2009 in Merkel's first term.

That would be unlikely to produce a radical change in policies.

But it could signal subtle shifts: perhaps a greater emphasis on bolstering economic growth and less on the austerity that Germany has insisted on in exchange for bailing out economically weak European countries such as Greece.

Final results are due within hours of polls closing at 6pm. But, with margins so close, the country might still face weeks of horse-trading before a clear picture of the new government emerges.

Merkel calls her current coalition "the most successful government since reunification" 23 years ago. She points to the robust economy and unemployment which, at 6.8%, is very low for Germany and far below that of many countries in the eurozone.

Polls give Merkel a popularity rating of about 70%. But the sky-high popularity does not extend to her coalition, which has bickered frequently over issues ranging from tax cuts to privacy laws.

The Free Democrats have taken much of the blame.

"They said it was a marriage of love - that was how they ran in 2009 - and then the divorce lawyer spent the whole time running along the sidelines," Steinbrueck said at a rally in Frankfurt on Saturday.

Steinbrueck's platform stresses the importance of narrowing the gap between rich and poor. He wants to introduce a national minimum wage and raise income tax for top earners. Merkel and the Free Democrats contend that both measures could hurt the economy.

A new party, Alternative for Germany, which calls for an "orderly break-up" of the euro and appeals to socially conservative voters, could steal votes and complicate results.