THE WALL STREET JOURNAL: BERLIN -- A center-right alliance led by German Chancellor Angela Merkel was set for victory in Germany's national elections on Sunday, opening the door to modest tax cuts and labor-market changes that could help strengthen the fragile recovery in Germany's crisis-battered economy.
Ms. Merkel's conservative Christian Democratic Union and its pro-business ally, the Free Democratic Party, were set to win a small majority in Germany's lower house of parliament, the Bundestag, according to early results. The CDU, its Bavarian conservative sister-party, the Christian Social Union, and the FDP won 48.4% of the national vote on Sunday, according to projections by state broadcaster ARD.
"For corporate Germany, this is a good signal," said Thorsten Polleit, economist at Barclays Capital in Frankfurt. "The FDP, which will feel very confident now, and much of the CDU will want to bring down government spending in order to cut income taxes."
The parties are expected to form a new national government quickly, replacing the fractious bipartisan coalition between Ms. Merkel's CDU and the left-leaning Social Democratic Party that has ruled Germany since 2005.
For the U.S. and other German allies, the election result will bring continuity in German foreign policy, including on Afghanistan, where the FDP is expected to continue to support German troops' presence, while calling for an exit strategy in the medium term. Unlike the SPD, which has had a sometimes difficult relationship with the U.S., the FDP has long been a staunch proponent of Germany's trans-Atlantic partnership.
President Barack Obama called Ms. Merkel on Sunday to offer his congratulations, the White House said in a statement, adding: "The President and Chancellor Merkel agreed that with the election of a strong German government, our cooperation will further strengthen and deepen."
Ms. Merkel, a 55-year-old physicist who is Germany's first female chancellor and its first leader to grow up in the former East Germany, told her cheering supporters in Berlin Sunday night she wants to be "a chancellor for all Germans," an attempt to reassure voters that she would temper market-oriented changes with concern for social harmony. Ms. Merkel said that she would govern for "the workers as well as for the entrepreneurs." >>> Marcus Walker | Monday, September 28, 2009
