German Chancellor Angela Merkel claimed victory for a new center-right government Sunday after elections propelled her Christian Democratic Union party and the pro-business Free Democrats to a majority.
"We have achieved something great," she told supporters in Berlin Sunday night. "We have managed to achieve our election aim of a stable majority in Germany for a new government."
Many had expected Merkel would stay chancellor for a second four-year term, because she had her choice of joining political forces with the Free Democrats (FDP) or staying with the center-left Social Democrats (SPD), with whom her party has been allied for the past four years in the "grand coalition."
CDU's alliance with the SPD, its traditional rival, has been an awkward one. Frank-Walter Steinmeier, head of the SPD, was Merkel's main challenger in the election -- and her foreign minister.
"There is no talking around it: this is a bitter defeat," Steinmeier said at SPD headquarters in Berlin, the Associated Press reported. "Our job in the opposition will be to very carefully pay attention to whether they can do it."
As of 12:30 a.m. Monday, Merkel's CDU and its sister party the Bavarian Christian Social Union were projected to get 33.8 percent of the vote, and the FDP 14.5 percent, according to German public television. Projections showed Steinmeier's SPD receiving 23.1 percent, its poorest showing since World War II, according to Reuters.
Merkel said she would hold coalition talks with FDP leader Guido Westerwelle right away. Westerwelle is widely expected to become foreign minister. His business-friendly policy views include promoting free markets, small government and tax cuts.
Although Merkel's conservatives and the FDP ran on reducing taxes to boost consumer confidence and the economy, cuts will likely have to wait at least a year, economists predicted, as Germany works to recover from its worst recession since World War II.
"It will be enormously difficult for the government to strike a balance between reducing state debt and consolidating the budget at the same time as stimulating growth," said Andreas Rees, economist at UniCredit, according to Reuters.
Nonetheless, a new coalition between Merkel's party and the FDP means change is afoot, as opposed to if the grand coalition had stayed in power, noted Andre Prager, manager of sightseeing company Trabi Safari in Berlin.
"It's like an old relationship -- if they just stayed together because of the kids, then nothing would happen," he said. "It's a hope for change."