Merkel moves to ward off leadership challenge

Germany's Christian Democrat (CDU) leader Angela Merkel has called a snap leadership vote this morning to shore up her authority…

Germany's Christian Democrat (CDU) leader Angela Merkel has called a snap leadership vote this morning to shore up her authority in coalition talks after a disastrous result in Sunday's inconclusive general election, writes Derek Scally in Berlin.

The vote on her leadership of the CDU parliamentary party comes as the Social Democrats (SPD) insisted that only Chancellor Schröder could head a new government, despite trailing the CDU by three seats in the new parliament.

"We have the mandate to form a government. We are clearly the strongest party," said a wan-faced Dr Merkel yesterday morning, declining to discuss the reasons behind Sunday's surprise election result.

SPD leader Franz Müntefering was more bullish, saying that "Germans do not want Dr Merkel as their chancellor".

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Preliminary results gave the CDU 35.2 per cent of the vote or 225 seats in the new Bundestag, a three-point fall in support on the last election and at least six points behind its expected result. Support for the SPD dropped four points to 34.2 per cent or 222 seats.

Neither CDU nor SPD has a majority with their preferred coalition partners, respectively the liberal Free Democrats (FDP), with 61 seats, and the Green Party with 51 seats. The new Left Party will hold 54 seats and electoral turnout was 77 per cent.

Criticism of Dr Merkel was muted yesterday morning as party officials trooped into the party headquarters, still adorned with a huge poster of a benevolent-looking Dr Merkel and the words: "A new beginning."

Post-election voter analysis suggested that Dr Merkel's most serious mistake was appointing university professor and tax expert Paul Kirchhof as her campaign finance adviser. She touted him as a likely finance minister, but Prof Kirchhof pushed his own flat tax plan instead of the party's more modest proposals and alienated voters.

Yesterday Prof Kirchhof announced his withdrawal from politics and his return to teaching tax law in the University of Heidelberg.

One of the few CDU figures to criticise openly the party's performance was Friedrich Merz, a former CDU parliamentary leader sidelined by Dr Merkel. "The campaign was certainly not conducted as well as it might have been," he said.

Other senior party officials have kept their criticisms to themselves - at least for now - but Dr Merkel's future depends on today's vote and the outcome of coalition negotiations.

A coalition with the FDP and the Green Party would be her greatest chance to serve as chancellor, and CDU leaders made their first public overtures yesterday to the SPD's coalition partner of seven years.

"We have to explore everything with the Greens," said Peter Müller, the state premier of Saarland, and the CDU's economics and labour expert.

The prospect found swift, public backing from CDU general secretary Volker Kauder as well as the state premiers of Hesse and Thuringia, Roland Koch and Dieter Althaus.

But Joschka Fischer, foreign minister and de facto Green Party leader, said he was sceptical of the approach and ruled out serving as minister in a Dr Merkel cabinet.

Another option to break the electoral deadlock is a grand coalition led by Dr Merkel or Chancellor Schröder or neither. Left-wing SPD politicians called for the the party to agree a coalition with the Greens and the FDP.

Political observers in Berlin warned yesterday that a new government is unlikely to be formed before next month. Fears of prolonged uncertainty pushed the euro lower against the dollar yesterday.